Voltas shares sink nearly 8% on weak Q1 FY26 earnings; brokerage retains 'Buy'
According to brokerage Anand Rathi, the company's performance was hit by an "erratic summer", with its unitary cooling products (UCP) segment recording a 25 per cent year-on-year (YoY) drop in sales during the quarter.
- Aug 11, 2025,
- Updated Aug 11, 2025 2:58 PM IST
Shares of Voltas Ltd slumped 7.79 per cent in Monday's trade to hit a low of Rs 1,202.20 after the company reported a weak set of earnings for the April–June 2025 quarter (Q1 FY26). According to brokerage Anand Rathi, the company's performance was hit by an "erratic summer", with its unitary cooling products (UCP) segment recording a 25 per cent year-on-year (YoY) drop in sales during the quarter.
Market share slipped to 17.8 per cent at the end of June from 19.3 per cent earlier. Higher promotional spending and under-absorption of costs pressured margins, while inventory levels remained elevated.
While Voltas Beko gained market share, the segment remains in investment mode. The Projects business, however, reported a stronger order book. Management expects weakness to persist in Q2 but foresees a recovery from Q3, maintaining a long-term focus on market leadership, selective growth, and innovation. The domestic brokerage has retained its 'Buy' rating with a 12-month target price of Rs 1,568 (earlier Rs 1,544).
For Q1, profit after tax (PAT) dropped 58 per cent YoY to Rs 140 crore as revenue fell 20 per cent YoY to Rs 3,940 crore. UCP revenue declined 24.6 per cent YoY to Rs 2,870 crore, EMP (electromechanical projects) revenue was down 2.9 per cent to Rs 920 crore, and engineering product revenue slipped 15.8 per cent to Rs 130 crore.
The EBITDA margin fell 408 basis points (bps) to 4.5 per cent as other expenses rose 11.7 per cent YoY and staff costs increased 14 per cent. The UCP EBIT margin dropped 500 bps to 3.6 per cent, while the EMP EBIT margin was 5.3 per cent, down 177 bps. Losses from joint ventures, mainly Beko, stood at Rs 25.9 crore.
The management anticipates a rebound during the festival season and the "second summer" period, with Q3 and Q4 expected to offset the Q1 slump. In the long term, Voltas aims to maintain its No. 1 position in cooling products and achieve over 10 per cent market share in the home appliances segment.
Shares of Voltas Ltd slumped 7.79 per cent in Monday's trade to hit a low of Rs 1,202.20 after the company reported a weak set of earnings for the April–June 2025 quarter (Q1 FY26). According to brokerage Anand Rathi, the company's performance was hit by an "erratic summer", with its unitary cooling products (UCP) segment recording a 25 per cent year-on-year (YoY) drop in sales during the quarter.
Market share slipped to 17.8 per cent at the end of June from 19.3 per cent earlier. Higher promotional spending and under-absorption of costs pressured margins, while inventory levels remained elevated.
While Voltas Beko gained market share, the segment remains in investment mode. The Projects business, however, reported a stronger order book. Management expects weakness to persist in Q2 but foresees a recovery from Q3, maintaining a long-term focus on market leadership, selective growth, and innovation. The domestic brokerage has retained its 'Buy' rating with a 12-month target price of Rs 1,568 (earlier Rs 1,544).
For Q1, profit after tax (PAT) dropped 58 per cent YoY to Rs 140 crore as revenue fell 20 per cent YoY to Rs 3,940 crore. UCP revenue declined 24.6 per cent YoY to Rs 2,870 crore, EMP (electromechanical projects) revenue was down 2.9 per cent to Rs 920 crore, and engineering product revenue slipped 15.8 per cent to Rs 130 crore.
The EBITDA margin fell 408 basis points (bps) to 4.5 per cent as other expenses rose 11.7 per cent YoY and staff costs increased 14 per cent. The UCP EBIT margin dropped 500 bps to 3.6 per cent, while the EMP EBIT margin was 5.3 per cent, down 177 bps. Losses from joint ventures, mainly Beko, stood at Rs 25.9 crore.
The management anticipates a rebound during the festival season and the "second summer" period, with Q3 and Q4 expected to offset the Q1 slump. In the long term, Voltas aims to maintain its No. 1 position in cooling products and achieve over 10 per cent market share in the home appliances segment.