Voltas – Cool Your Portfolio with Hot Stock

Voltas a Tata group company has been in this business of Air Conditioning from Office to Commercial Retail and Cold Storage now. With Global Warming getting worse and the need of A/C increasing, Voltas is targeting a volume growth in room AC sales in India in FY12. It is also expanding market share from 19%, led by a new product range and a 20% jump in dealers.

For last quarter, owing to over a 25% decline in international MEP (Mechanical, Electrical and Plumbing works including central air-conditioning), Voltas sales growth was mere 5%. Voltas which focused on international market is now turning towards India which witnessed a robust growth of over 30% in MEP yet failed to boost overall performance, as international MEP is 60% of the segment.

Voltas Stock has fallen 40% since Nov2010, led by profit declines in Q2 and Q3FY11. Expect Voltas to Report an EPS of Rs 13 and Rs 16 for FY 12 and FY 13 and thus re-rating of the stock should be around corner.