Mehabe score: 4 G Factor: 3 Piotski Score: 6 The stock has a rating OBSERVE & HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 3 and Piotski score of 6.
Description
Voltas is engaged in the business of air conditioning, refrigeration, electro – mechanical projects as an EPC contractor both in domestic and international geographies (Middle East and Singapore) and engineering product services for mining, water management and treatment, construction equipments and textile industry.
Main Points
Segment 1: Unitary Cooling Products (36% of Revenue) #
Unitary Cooling products comprises Air Conditioners, Air Coolers, and Commercial Refrigeration products #
As of July 2021, Voltas is no. 2 in the Air Cooler Category with a market share of 10.8%.Site:VOLTASMain Symbol:VOLTAS
Stock trades at 1054.0, above its 50dma 1024.36. It also trades above its 200dma 929.69. The stock remains bullish on techicals
The 52 week high is at 1132.00 and the 52week low is at 585.60
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
– has been maintaining a healthy dividend payout of 27.71%
Weakness
– The company has delivered a poor sales growth of 6.01% over past five years.
– has a low return on equity of 12.39% for last 3 years.
Competition
– The industry trades at a mean P/E of 100.1x. Johnson Con. Hit trades at the industry’s max P/E of 224.74x. VOLTAS trades at a P/E of 66.4x
– Industry’s mean G-Factor is 4.0 while the mean Piotski score is 6.0. VOLTAS has a G-Factor of 3 and Piotski scoreof 6.
– Average 1 month return for industry is 3.0%. The max 1- month return was given by Voltas: a return of 3.91 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 2652.0 cr compared to Rs 2090.0 cr for period ended Mar 2020, a rise of 26.9%
Operating Profits reported at Rs 309.0 cr for period ended Mar 2021 vis-vis 173.0 for period ended Mar 2020 .
Operating Margins expanded 337.4 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 7.18 compared to Rs 3.87 for previous quarter ended Dec 2020 and Rs 4.8 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 0.0 cr for period ended Mar 2021 vis-vis sales of Rs 7658.0 cr for the period ended Mar 2020, a fall of 0%.
Net Profit reported at Rs 525.0 cr for period ended Mar 2021 vis-vis sales of Rs 517.0 cr for the period ended Mar 2020, rising 1.5%.
Company reported a poor Net Profit CAGR of -2.8% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 556.0 cr for period ended Mar 2021 vis-vis Rs 462.0 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 11.0% compared to 12.0% over the last 3 Years. – The stock has given a return of 76% on a 1 Year basis vis-vis a return of 22% over the last 3 Years. – The compounded sales growth on a TTM bassis is 0% vis-vis a compounded sales growth of 6% over the last 3 Years. – The compounded profit growth on a TTM basis is -5% vis-vis a compounded profit growth of -3% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has risen for the period ended Jun 2021. The Jun 2021 fii holding stood at 17.24% vis-vis 14.38% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 18.34% vis-vis 17.86% for Mar 2021
Conclusion
– is almost debt free.
– has been maintaining a healthy dividend payout of 27.71% – The company has delivered a poor sales growth of 6.01% over past five years.
– has a low return on equity of 12.39% for last 3 years.
Fundamentally, the stock remains weak on business fundamentals. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock trades above its 50 DMA 1024.36 and is trading at 1054.0 It has shown near term bullish momentum contrary to business fundamentals. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
