Nuvama cuts Voltas target price, warns of Q2 pain; all you need to know
Nuvama reiterated that near-term challenges persist, particularly as brands work to clear record inventories across channels.
- Sep 20, 2025,
- Updated Sep 20, 2025 1:16 PM IST
Voltas Ltd has flagged challenging conditions for the second quarter, with channel inventory levels remaining high at two to three months, Nuvama Institutional Equities said. The company also noted that expectations of a GST cut have slowed demand over the past five weeks.
Despite these near-term headwinds, Voltas remains optimistic about a revival in demand in the third quarter, driven by festive season demand and the anticipated GST reduction. The company plans to continue providing channel support and incentives through Q2 and possibly into Q3.
Nuvama said its estimates remain broadly unchanged, projecting a revenue/EBITDA/PAT CAGR of 8 per cent/6 per cent/10 per cent over FY25-28. The brokerage has maintained a target price of Rs 1,070, down 24 per cent from the current level of Rs 1,419.40, with a ‘Reduce’ rating.
Recent results showed a decline in the cooling products category for both Voltas and the broader industry in Q1 FY26, a trend expected to continue in Q2 due to a high base from the previous year. Nuvama noted that the weak season and the upcoming BEE change event from January 1, 2026, suggest near-term pain for brands, with liquidation of record channel and brand inventories likely.
Voltas is focusing on regaining market share in its core cooling segment, supported by the GST reduction from 28 per cent to 18 per cent. The company is also expanding its appliances portfolio across RAC, dishwashers, refrigerators, washing machines, air coolers, and fans. Commissioning of its Chennai facility is expected to support medium-term demand.
The domestic projects business continues to show steady growth and margin improvement, while international projects are being approached cautiously, with a focus on margins and risk management. The engineering segment, though small, is expected to perform steadily.
Nuvama reiterated that near-term challenges persist, particularly as brands work to clear record inventories across channels.
Voltas Ltd has flagged challenging conditions for the second quarter, with channel inventory levels remaining high at two to three months, Nuvama Institutional Equities said. The company also noted that expectations of a GST cut have slowed demand over the past five weeks.
Despite these near-term headwinds, Voltas remains optimistic about a revival in demand in the third quarter, driven by festive season demand and the anticipated GST reduction. The company plans to continue providing channel support and incentives through Q2 and possibly into Q3.
Nuvama said its estimates remain broadly unchanged, projecting a revenue/EBITDA/PAT CAGR of 8 per cent/6 per cent/10 per cent over FY25-28. The brokerage has maintained a target price of Rs 1,070, down 24 per cent from the current level of Rs 1,419.40, with a ‘Reduce’ rating.
Recent results showed a decline in the cooling products category for both Voltas and the broader industry in Q1 FY26, a trend expected to continue in Q2 due to a high base from the previous year. Nuvama noted that the weak season and the upcoming BEE change event from January 1, 2026, suggest near-term pain for brands, with liquidation of record channel and brand inventories likely.
Voltas is focusing on regaining market share in its core cooling segment, supported by the GST reduction from 28 per cent to 18 per cent. The company is also expanding its appliances portfolio across RAC, dishwashers, refrigerators, washing machines, air coolers, and fans. Commissioning of its Chennai facility is expected to support medium-term demand.
The domestic projects business continues to show steady growth and margin improvement, while international projects are being approached cautiously, with a focus on margins and risk management. The engineering segment, though small, is expected to perform steadily.
Nuvama reiterated that near-term challenges persist, particularly as brands work to clear record inventories across channels.