Voltas Ltd's Q1FY19 consolidated net profit rises 0.65% yoy to Rs187.10cr: Beats Estimates

The company’s consolidated revenue stood at Rs2,148.10cr, up 10.46% yoy.

Aug 10, 2018 08:08 IST India Infoline Research Team

Voltas Ltd Q1FY19

Consolidated Results Q1FY19: (Rs. in cr)

Q1FY19 YoY (%)
Revenue 2,148.1 10.5
EBITDA 243.2 16.7
EBITDA Margin (%) 11.3 61
Net Profit (adjusted) 187.1 0.7
***EBITDA margin change is bps
Voltas’ consolidated Q1FY19 numbers have exceeded market expectations on sales and EBITDA profit with a slight miss on net profit. Sales have increased 10.5% yoy to Rs2,148.1cr from Rs1,944.6cr in Q1FY18, above the estimates by ~5%. EBITDA was up 16.7% yoy to Rs243.2cr during the quarter from Rs208.3cr in Q1FY18, as against estimated EBITDA of Rs221cr. EBITDA margin increased ~61bps yoy to 11.3% in Q1FY19. Net profit was almost flat at Rs187.1cr vs. Rs185.9cr in Q1FY18, vs. estimated profit of Rs196cr.

• The segmental sales are not strictly comparable yoy due to excise duty levied in the corresponding quarter of the previous year. The sales growth in the quarter is led by electro-mechanical projects & services (EMPS) business, which has grown 31% yoy to Rs866.4cr. The sales growth is a result of efficient execution in both domestic and international orders. 

• The order book of EMPS segment stands at ~Rs4,600cr (Rs2,700cr domestic, Rs1,900cr international) – down 6% yoy and 9% qoq. The company incurred order inflow of ~Rs420cr in Q1FY19.
• Voltas is banking on domestic infra spends (HVAC, rural electrification, water treatment) to drive order inflows. In the Middle East, outlook is improving on back of higher crude prices and rising infra spends.

• Unitary Cooling Products (UCP) segment declined 2% yoy to Rs1,191.1cr. The company has improved its market share to 23.5% during the quarter and has ramped up its product mix to gain market share in the inverter AC (~50% of Q1FY19 AC volumes) segment.

• Engineering Product and Services (EPS) segment posted a sharp decline of 15% yoy to Rs77.2cr. The impact due to demonetization and GST implementation has been severe on the textile machinery industry. In mining and construction equipment, Mozambique operations continue to drive the performance. On the domestic front, a gradual recovery appears to be on the horizon.

• EMPS segment’s EBIT has increased 2.5x resulting in EBIT margin improvement from 5.3% in Q1FY18 to 10.2% in Q1FY19.The margin improvement is on account of higher margin orders and certain projects reaching the margin recognition threshold level.

• UCP segment EBIT declined 13% yoy owing to subdued sales and discounts offered to attract customers. Hence, EBIT margin has declined to 12.5% in Q1FY19 from 14.1% in Q1FY18. EPS’ segment margin improved to 34.7% in Q1FY19 vs. 28.5% in Q1FY18.

Technical View:

Voltas Ltd is currently trading at Rs. 609, up by 16.15 points or 2.72% from its previous closing of Rs. 592.85 on the BSE.
The scrip opened at Rs. 598 and has touched a high and low of Rs. 614.85 and Rs. 591.75 respectively. So far 32,01,180 (NSE+BSE) shares were traded on the counter. The stock is currently trading below its 200 DMA.

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