VOLTAS - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 4.1

Voltas — a flagship Indian brand in consumer durables and engineering solutions — shows resilience with solid return metrics, healthy financial structure, and strong brand equity, albeit trading at a premium valuation.

🧾 Core Financial Analysis

Return Metrics

ROE: 13.4%, ROCE: 17.6% — strong capital efficiency, especially in capital-light businesses

EPS: ₹25.4 — solid earnings profile relative to price

Profit Growth

PAT Qtr: ₹236 Cr, up from ₹131 Cr — 113% growth, showing excellent quarterly performance

Dividend Yield: 0.52% — modest, suitable for long-term investors looking for moderate income

Leverage Position

Debt-to-Equity: 0.14 — conservatively financed, plenty of headroom for expansion or capex

📊 Valuation Metrics

Metric Value Implication

Stock P/E 53.6 At par with industry PE (53.3) — not cheap, but fair relative

PEG Ratio 3.03 Overvalued if growth slows — demands consistent earnings surge

P/B Ratio ~6.78 High — suggests premium for brand strength or future growth

Book Value ₹197 Price significantly above book, valuation driven by earnings and brand

🏢 Business Model & Strategic Position

Segments: Consumer appliances (ACs, refrigerators), engineering solutions, and project services

Moats & Strengths

Strong brand recognition and distribution network across India

Seasonal demand cycles aligned with product portfolio (e.g., air conditioners)

Low debt and healthy margins make it a defensive play in turbulent environments

Concerns

PEG > 3, high PE — indicates stretched valuation

Slight decline in FII holding (-0.79%) shows cautious institutional sentiment

📉 Technical Trends

RSI: 47.4 — neutral zone, not overbought/oversold

MACD: 5.40 — mildly bullish

DMA Comparison

Price hovering around 50-DMA (₹1,332) and slightly below 200-DMA (₹1,391) — stock consolidating

Volume is average — no strong accumulation signals yet

🎯 Entry Zone & Investment Outlook

Entry Zone: ₹1,280–₹1,320 — look for dips below 50-DMA or broader market correction

Target (12–18 months): ₹1,550–₹1,650 — if earnings continue growing at current pace

Investor Profile

Good for long-term holders seeking stability and low-leverage growth

Less appealing for value investors due to steep PEG and premium pricing

Moderate dividend yield adds cushion

Would you like me to build a discounted cash flow model or compare Voltas with peers like Blue Star, Whirlpool India, or Hitachi? We can explore whether it’s priced fairly against the sector’s evolving demand trends. 🧊📈

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