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Earnings in line; UCP segment’s margin above est.

* Voltas (VOLT)’s operating performance was in line with our estimates, with UCP’s margin at 10.0% vs. our estimate of 7.5%. Revenue grew 13% YoY to INR47.7b (in line), fueled by 4%/17% YoY revenue growth in the EMPS/UCP segments. EBITDA jumped 75% YoY to INR3.3b (in line, as a higher-thanestimated margin in the UCP segment offset lower-than-estimated profit in other segments). The EMPS segment reported a loss of INR17m vs. a loss of INR1.1b in 4QFY24. OPM expanded 2.5pp YoY to ~7.0% (in line). Other income was up 46% YoY, which led to a profit of INR2.4b (+132% YoY).

* The company’s YTD market share in RAC stood at ~19% as of Mar’25 (exit market share at 20.5% as of Dec’24) vs. 18.7% as of Mar’24. Voltbek Home Appliances reported volume growth of ~56% YoY in FY25. ? We have a BUY rating on the stock. However, we will review our assumptions after the concall on 8 th May’25.

UCP’s revenue in line; EBIT margin at 10%

* VOLT’s consol. revenue/EBITDA/Adj PAT stood at INR47.7b/INR3.3b/ INR2.4b (up 13%/75%/132% YoY and in line vs. estimates) in 4QFY25. Depreciation/interest costs grew 19%/12% YoY, whereas ‘other income’ rose 46% YoY.

* Segmental highlights: a) UCP – Revenue was up 17% YoY at INR34.6b, and EBIT increased 27% YoY to INR3.4b. EBIT margin was up 80bp YoY to 10.0%; b) EMPS – Revenue rose 4% YoY to INR11.4b. It reported a loss of INR17m compared to the loss of INR1.1b in 4QFY24; c) PES – Revenue declined 16% YoY to INR1.3b, and EBIT declined 29% YoY to INR341m. EBIT margin contracted 4.8pp YoY at ~25.8%.

* In FY25, revenue/EBITDA/Adj. PAT stood at INR154.1b/11.2b/8.4b (up 23%/135%/252% YoY. The UCP/EMPS segment revenue grew 30%/13% YoY to INR106.1b/INR41.6b, whereas the PES segment revenue declined ~3% YoY to INR5.7b. UCP EBIT grew 29% YoY to INR8.9b, and EBIT margin was flat YoY at 8.4%. Operating cash outflow stood at INR2.24b vs. operating cash inflow of 7.6b in FY24. Capex stood at INR2.1b vs. INR2.9b in FY24. Net cash outflow stood at INR4.3b vs. net cash inflow of INR4.7b in FY24.

Valuation and view

* VOLT’s UCP business delivered strong revenue growth as RAC demand remained healthy in FY25; the FY25 volume growth stood at 30% YoY. The segment margin was above our expectations in 4QFY25. VoltBek, too, has seen strong volume growth of 56% in FY25, alongside notable market share gains in refrigerators and washing machines. We would seek management’s commentary on the UCP segment, channel inventory, and the outlook for Voltbek margins.

* We have a BUY rating on the stock. However, we will review our assumptions following the concall on 08th May’25 (Concall Link).

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