Voltas: Investors should tone down expectations in FY18

Impact of GST may last for 1-2 quarters; profitability may also see pressure due to competition

Not known for extreme volatility, the stock of Voltas took the Street by surprise when it posted a single-day gain of 10 per cent when it entered into a partnership with Arcelik. However, after touching a 52-week high of Rs 515 in early June, the stock hasn’t sustained the momentum. It has corrected by about 11 per cent since then. 

A large part of this correction may be attributed to the uncertainties in FY18 earnings courtesy introduction of the goods and services tax (GST), which is seen as a price escalator for the consumer durables segment. Tax rates are up