“The slowdown impact in engineering products and services segment due to demonetization and GST implementation in the Textile Machinery Industry is well known. In Mining and Construction Equipment, Mozambique operations continue to drive the performance,” Voltas said in a press release.
“Voltas reported below estimate results, mainly due to revenue slippage during the quarter. Revenue at Rs 20.5 billion was flat during the quarter as the important unitary cooling products (AC business) saw 2% decline in revenue, mainly due to restocking by trade channel along with pre-buying in Q3FY18 due to expected price rise from Jan-18 and increased competitive intensity. The improved operating performance was broad based across all segments with 190bps and 80bps improvement in Project business and AC business, respectively,” said analysts at Antique Stock Broking in result review.
Order intake improved 23% (to Rs 12.3 billion) with order backlog improving 17% to Rs 50.6 billion. Arcelik JV is on track to launch in H2CY18 in time to capture festive demand. Due to revenue slippage, we have trimmed our earnings estimate for FY19E/FY20E by 11%. We continue to like the stock due to the company's market leadership with large opportunity and strong earnings trajectory & return ratios, the brokerage firm said with ‘buy’ rating on the stock and 12 month target price of Rs 675 per share.
At 09:48 am; the stock was trading 7% lower at Rs 543 on the BSE, as compared to 0.43% rise in the S&P BSE Sensex. A combined 4.94 million shares changed hands on the counter on the BSE and NSE so far. In past one month the stock underperformed the market by falling 16% against 2% rise in the benchmark index.