VOLTAS - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 3.9

📊 Core Financials Overview

Profitability

ROCE: 12.7% and ROE: 9.79% — moderate, indicating decent but not industry-leading capital efficiency.

EPS: ₹19.4, with PAT declining from ₹220 Cr. to ₹203 Cr. — a 40% drop, suggesting margin pressure or seasonal softness.

Debt-to-equity: 0.07 — very low, reflecting strong financial discipline and low leverage risk.

Dividend Yield: 0.49% — modest, consistent with a growth-oriented capital allocation strategy.

Institutional Sentiment

FII holdings declined (-0.79%), while DII holdings increased (+0.16%) — mixed sentiment, with domestic investors showing cautious optimism.

💰 Valuation Metrics

Metric Value Insight

P/E Ratio 73.6 High vs. industry average (56.8) — suggests premium pricing.

P/B Ratio ~5.8 Elevated, typical for branded consumer durable companies.

PEG Ratio 7.84 Very high — valuation stretched relative to earnings growth.

Intrinsic Value ~₹1,350–₹1,400 (est.) Current price of ₹1,426 is slightly above fair value.

🧠 Business Model & Competitive Edge

Core Operations: Voltas Ltd. operates in air conditioning, refrigeration, and engineering projects. It’s a market leader in room air conditioners and has a growing footprint in commercial cooling and MEP services.

Strengths

Strong brand recall and distribution network.

Backed by Tata Group — governance and strategic support.

Diversified revenue streams across domestic and international markets.

Challenges

Recent profit contraction and elevated valuation multiples.

PEG ratio suggests earnings growth may not justify current pricing.

RSI at 60.9 — nearing overbought territory, MACD at 19.4 — bullish momentum but may be peaking.

📈 Entry Zone & Technicals

DMA 50: ₹1,367, DMA 200: ₹1,384 — price is above both, indicating short-term strength.

RSI: 60.9 — neutral to slightly overbought.

MACD: 19.4 — bullish crossover.

📌 Entry Zone: ₹1,350–₹1,400 — ideal for accumulation on dips.

🕰️ Long-Term Holding Guidance

2025 Target: ₹1,500–₹1,650

2026–2028 Target: ₹1,800–₹2,100

2030 Target: ₹2,400+

Holding Strategy: Voltas is a well-established consumer and engineering brand with solid fundamentals, low debt, and strong market leadership. Suitable for long-term investors seeking exposure to India’s infrastructure and consumer appliance growth. Accumulate during technical weakness and hold through cycles.

You can explore Voltas’ shareholder structure and institutional ownership or check Investing.com’s live price and analyst targets for deeper insights

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simplywall.st

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www.investing.com

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