Voltas’ Q3FY19 consolidated numbers were broadly in-line with estimates. Revenue for the quarter was up 8.5% yoy to Rs1,491.8cr. On account of higher raw material cost, EBITDA was up only marginally by 1.3% yoy to Rs115.7cr. Thus, EBITDA margin contracted by 55bps yoy to 7.8%. Net profit for the quarter was impacted by ~Rs31cr loss in JVs (largely Voltas-Beko JV). PAT stood at Rs78.1cr, down 22.3% yoy.
Revenues for Electro-Mechanical Projects and Services (EMPS) segment grew 16.2% yoy to Rs875.2cr, supported by on-track execution of a better-quality order book. However, the company also provided Rs13cr towards payment delays in an international project. EBIT was up 29.6% yoy to Rs69.2cr with 75bps expansion in EBIT margin to 4.7%. End-Q3FY19 order book of ~Rs5,000cr provides growth visibility going forward.
Revenue for Engineering Products and Services (EPS) segment grew by 19.6% yoy to Rs83.2cr in Q3FY19. EBIT for the quarter came at Rs21.9cr, up 4% yoy with EBIT margin of 26.4% (contraction of 396bps yoy). The segment contributed 6% to the consolidated revenue of the company.
Unitary Cooling Products reported 3% yoy decline in revenue to Rs525.9cr with a sharp decline in EBIT by 36.3% yoy to Rs44.7cr. EBIT margin stood at 8.5%, contraction of 450bps yoy.
The company has announced Rs500cr investment in Andhra Pradesh for AC manufacture/assembly, given the changing tax and cost structure.
On Voltas-Beko JV, management highlighted that the September 2018 launch was well received, in terms of product and communication and the loss should moderate going forward. Commissioning of manufacturing unit by end of 2019 would aid portfolio expansion and cost structure.
Voltas Ltd is currently trading at Rs. 524, up by 1.25 points or 0.24% from its previous closing of Rs. 522.75 on the BSE.
The scrip opened at Rs. 524.40 and has touched a high and low of Rs. 525.80 and Rs. 519.50 respectively. So far 3,01,400 (NSE+BSE) shares were traded on the counter. The stock is currently trading above its 200 DMA.
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