VOLTAS LTD - Q2 FY18     
  Consolidated        

VOLTAS LTD reported strong yearly growth for the second quarter FY18 supported by higher PAT and controlled expenditure. Revenue stood at Rs. 10367 Mn for current quarter against Rs. 9815 Mn moving 6% up YOY. EBDITA for Q2 FY18 was reported at Rs. 1369 Mn compared to Rs. 1345 Mn same period previous year growing 2% YOY. PAT jumped to Rs. 954 Mn in the current September quarter against Rs. 782 Mn corresponding period previous year growing 22% YOY. Other Income exhibited de-growth of 7% QOQ and 22% YOY in Q2 FY18. Other Income was reported at Rs. 512 Mn compared to Rs. 658 Mn in Q2 FY17. Operating expenditure was at Rs. 9510 Mn in the current quarter against Rs. 9128 Mn same period previous year growing 4% YOY. EBDITA & Net Profit Margin were reported at 13.20% & 9.20% respectively in the current September quarter. EBDITA margin declined 50 basis points whereas Net Profit Margin expanded 123 basis points YOY. One basis point is 1/100^th of a percentage. Higher Net Profit Margin was attained on the back of lower finance, depreciation and taxation expenditure in the current second quarter FY18. Interest/finance costs fell 34% YOY from Rs. 33 Mn in Q2 FY17 to Rs. 22 Mn in the current quarter. Taxation was also lower by 19% YOY and was reported at Rs. 343 Mn in Q2 FY18. 

Voltas Ltd with market cap of Rs. 205427 Mn is India's largest air conditioning company, and one of the world's premier engineering solutions providers and project specialists. The company offers engineering solutions for a wide spectrum of industries in areas such as heating, ventilation and air conditioning, refrigeration, electro-mechanical projects, textile machinery, mining and construction equipment, water management & treatment, cold chain solutions, building management systems, and indoor air quality. Voltas has reported weak sequential numbers in a traditionally weak September quarter, but yearly growth is strong with stable revenue, controlled expenditure and higher PAT. Voltas currently has market share of 23% in the room air conditioner market for September 2017. Engineering Products & Services de-grew 11%, whereas Electro-Mechanical Projects & Services and Unitary cooling products grew 3% & 15% respectively in the current September quarter. We recommend BUY for the stock for medium & long term with target of Rs. 725.



Disclosure

Name Of Research Analyst	Financial Exposure/Interest	Ownership
Suhani Adilabadkar	Nil	Nil
Relative	Owns Shares In the Company	Less than 1%

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