Voltas net down 19% on weak order book, muted demand

Net sales decline 3% to Rs 1,115 for the quarter versus Rs 1,150 crore a year ago

Engineering and cooling products maker Voltas’ consolidated net profit fell 19 per cent to Rs 62 crore for the quarter ended December from Rs 76 crore in the year-ago period. Net sales fell three per cent to Rs 1,115 from Rs 1,150 crore a year ago. The company was hit by a weak order book in the core electro-mechanical projects and services, which gives the Tata group company nearly 60 per cent of its revenues. Revenue in this segment was down to Rs 643 crore from Rs 797 crore a year ago.

The order book dropped to Rs 3,946 crore from Rs 4,210 crore a year ago. The segment reported a loss of Rs 4 for the quarter against a Rs 6-crore profit in the year-ago period. Revenue of engineering products and services, which gives Voltas about a tenth cent of its top line, rose five per cent to Rs 112 crore from Rs 107 crore in the year-ago period. Profit from the segment rose to Rs 36 crore from Rs 26 crore a year ago.

The unitary cooling products division, which includes Voltas' popular room air conditioners such as the All Weather AC, grew 45.19 per cent for the December quarter to Rs 347 crore versus Rs 239 crore a year ago. Profits jumped to Rs 46 crore in the quarter versus Rs 15 crore a year ago. Voltas derives nearly 30 per cent of its revenues from this vertical. The company said it saw better sales in ACs and commercial refrigeration during the quarter on account of a late onset of winter.

At the operating level,that is, earnings before other income, finance and exceptional gains, however, Voltas managed to deliver an over three-fold jump in profit to Rs 62.41 crore mainly on account of lower operating expenses. The latter was down almost seven percent in the December quarter to Rs 1056.99 crore versus Rs 1135.23 crore a year ago.

The Voltas stock was up nearly eight per cent in an otherwise weak market to close the day at Rs 106.60 on the Bombay Stock Exchange.