Voltas shares: Should you buy, hold or sell this Tata group stock?

Analysts from various domestic brokerages recently attended an analyst meet for Tata group company Voltas, where they gathered insights into the company's growth strategies and current market conditions. According to Emkay Global, Voltas management reported a significant 20-25% drop in RAC secondary sales during April and May 2025. This decline has similarly affected primary sales, with high inventory levels persisting at around 6-8 weeks. Despite the subdued demand, Voltas is opting for incentives like freebies instead of broad-based price cuts. Emkay Global retains a 'BUY' rating on Voltas, citing valuation comfort and reiterating their target price of Rs 1,450 as they see weather-related disruptions as entry opportunities.

HDFC Securities noted that despite weak demand, Voltas has managed to maintain stable prices. The company has exercised caution in its international Electro-Mechanical Projects and Services (EMPS) sector while expecting slow growth domestically in FY26, with a pick-up in FY27. The Beko joint venture has shown growth in the first quarter of FY26, with the company aiming to gain market share and reduce losses. They estimate a CAGR of 10% for revenue, 15% for EBITDA, and 17% for APAT over FY25-27E, maintaining a 'BUY' with a target price of INR 1,420 per share.

Nomura India expressed concerns about the impact of unseasonal rains in April and May on Voltas's performance. It foresees a downside risk to their flat year-on-year industry volume estimate for the first quarter. Nomura also highlighted competition and aggressive pricing as potential margin risks for Voltas, despite the production-linked incentives. The firm maintains a 'Neutral' rating with a target price of INR 1,290, factoring in 10% industry growth in FY26F.

Nuvama has reduced its FY26 earnings per share (EPS) estimate for Voltas by 8%, attributing this adjustment to a projected 5% growth in unitary cooling products (UCP), down from their earlier estimate of 12%. They maintain a 'HOLD' rating, with a revised target price of INR 1,190. Despite the current weak summer season, Nuvama remains optimistic about the long-term potential for growing RAC penetration and high growth rates over the medium term.

Additionally, Nomura India reported that despite a balanced risk-reward trade-off at a valuation of around 35x FY27F, they maintain their 'Neutral' rating on Voltas. They applied a target P/E of 33x for UCP, 15x for Project, and 15x for Service, along with valuing the VoltBek (unlisted) at INR 122 per share. They set a target price of INR 1,290, reflecting cautious optimism amidst current market conditions.

Brokerages agree that while the company faces short-term pressures, particularly from weather disruptions and inventory management, there remains potential for growth due to strategic initiatives and market conditions.