VOLTAS - Investment Analysis

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

Investment Rating: 3.6

❄️ Fundamental Analysis of Voltas Ltd (VOLTAS)

✅ Strengths

Strong Brand & Sector Positioning

Market leader in air conditioning and cooling solutions

Beneficiary of rising consumer demand and infrastructure push

Healthy Profitability

ROCE: 17.6%, ROE: 13.4% — decent returns, though not exceptional

EPS: ₹25.4, with Qtr Profit Growth: +113% — strong earnings rebound

Low Leverage

Debt-to-Equity: 0.14 — conservative capital structure

Technical Setup

MACD: +5.40, RSI: 47.4 — neutral-to-bullish

Price near DMA 50: ₹1,332, slightly below DMA 200: ₹1,391

⚠️ Concerns

Premium Valuation

P/E: 53.6 vs Industry PE: 53.3 — fairly priced, but not cheap

PEG Ratio: 3.03 — expensive relative to growth

Book Value: ₹197 vs Price: ₹1,335 — ~6.8x book, high premium

Low Dividend Yield: 0.52% — not attractive for income investors

Institutional Outflow

FII Hold ↓ 0.79% — foreign investors trimming exposure

Volume Below Average — suggests low conviction in current price action

📉 Ideal Entry Price Zone

Entry Zone: ₹1,250–₹1,300

Near support and below DMA 50

Offers better valuation comfort and trend support

🧭 Long-Term Investment Outlook

Voltas is a moderate-to-good candidate for long-term investment, especially for investors seeking exposure to consumer durables and infrastructure. Its brand strength and earnings rebound are promising, but valuation remains a concern.

Holding Period: 3–5 years

Reassess if ROE improves to 15%+ and PEG drops below 2.0

Monitor market share, margin expansion, and seasonal performance

🚪 Exit Strategy (If Already Holding)

Partial Exit Zone: ₹1,500–₹1,600

Near resistance and valuation ceiling

Full Exit

If ROE stagnates below 12% for 2+ quarters

If PEG remains above 3.0 without earnings acceleration

If price breaks below ₹1,200 and fails to recover

Reinvest: On dips near ₹1,250 if fundamentals remain strong

Would you like a comparison with peers like Blue Star, Whirlpool, or Dixon Technologies to assess relative strength in the consumer appliance space?

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