Synopsis: Voltas shares plunged over 9% today post its Q4FY24 results, marking a third consecutive session of decline. Despite a 22.75% drop in net profit, revenue rose 42%. Total expenses surged, leading to a sequential EBITDA margin decline. Brokerages like Nomura maintain a 'buy' rating, while others like Morgan Stanley and Macquarie offer more cautious outlooks.
Shares of Voltas experienced a significant drop of over 9% in intra-day trading today following the release of disappointing results for the quarter ended March 2024 (Q4FY24). This marks the third consecutive session of decline for the FMEG (Fast-Moving Electrical Goods) firm, with a total loss of over 15% during this period.
The firm reported a 22.75% decline in its consolidated net profit for Q4FY24, amounting to Rs 110.64 crore compared to Rs 143.23 crore in the corresponding period last year, primarily due to increased expenses. Despite this, the revenue from operations for the air conditioning and engineering services provider surged by 42% in the quarter under review, reaching Rs 4,203 crore from Rs 2,957 crore in the previous year.
Total expenses in the fourth quarter rose to Rs 4,044.90 crore from Rs 2,761.45 crore in the same period a year ago. Additionally, Voltas recorded a 340 basis point sequential drop in its EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) margin.
The stock saw a sharp decline of 9.1% to reach its day's low of Rs 1,261.65. Despite today's setback, the scrip remains over 69% above its 52-week low of Rs 745, recorded on July 14, 2023. However, it has fallen nearly 16% from its record high of Rs 1,500, achieved earlier this month on May 2, 2024.
Over the past year, the stock has witnessed a remarkable surge of over 72%, and it has grown by more than 29% in 2024 Year-To-Date (YTD).
For the fiscal year ended March 31, 2024 (FY24), Voltas reported a consolidated net profit increase of over 82% to Rs 248.11 crore from Rs 136.22 crore in the previous year. Meanwhile, its consolidated revenue from operations surged by 31.4% in FY24 to Rs 12,481.21 crore compared to Rs 9,498.77 crore in FY23.
Additionally, Voltas announced that its board of directors has recommended a dividend of 550% at Rs 5 per share of the face value of Re 1 per share for FY24, subject to the approval of shareholders.
Following the Q4 earnings release, brokerage firms have shared their outlook on Voltas. Nomura has maintained a 'buy' rating with a target price of Rs 1,450 per share, foreseeing positive future performance and a potential 15% upside. On the other hand, Morgan Stanley has retained an 'equal-weight' rating with a target of Rs 1,160 per share, indicating a more neutral stance and an 8% downside.
Macquarie has also upheld a neutral rating with a target price of Rs 842 per share, suggesting a downside of over 33%. The brokerage expressed concerns about margin misses in Q4 and underwhelming UCP (unitary cooling products) margins despite strong seasonal demand. Additionally, it highlighted a slight market share loss, indicating potential challenges for the company.
In conclusion, while Voltas faces short-term challenges, its long-term outlook remains subject to varying assessments by brokerage firms, urging investors to weigh the risks and rewards carefully before making investment decisions.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies. We advise investors to check with certified experts before taking any investment decisions.
Related Questions
1. What are the key highlights of Voltas' Q4FY24 results?
The key highlights of Voltas' Q4FY24 results include a significant decline in consolidated net profit, a substantial increase in revenue from operations, and a notable drop in EBITDA margin.
2. How has Voltas' stock performed in the recent trading sessions?
Voltas' stock has witnessed a significant decline of over 9% in intra-day trading following the release of disappointing Q4FY24 results, marking the third consecutive session of losses.
3. What is the outlook on Voltas' future performance by brokerage firms?
Brokerage firms have provided varying outlooks on Voltas' future performance, with some maintaining a 'buy' rating while others suggesting a more cautious approach due to short-term challenges.
4. What factors are influencing the recommendation of brokerage firms regarding Voltas' stock?
Brokerage firms' recommendations regarding Voltas' stock are influenced by factors such as Q4FY24 results, revenue trends, EBITDA margin, and market share dynamics.
