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Voltas (VOLT.BO; Rs162.25; 2M)
Takeaways from Mumbai — Voltas presented at the Citi India Investor
Conference in Mumbai. Below are key takeaways.
What's New: Unitary Cooling Products — The company is expecting slower
growth in this segment in FY12 due to weak sales in April and the early advent of
the monsoons. However, management indicated that Voltas has been growing
faster than the market and has been continually gaining market share (currently
~17%). Voltas and its competitiors have rolled back recent price hikes.
Electromechanical Projects — Voltas has an order book of ~Rs49bn (~Rs20bn
domestic). With the exception of ~Rs2bn metro rail order, the domestic orders
are executable over 12-13 months. Rising competitive intensity in the Middle
East is putting pressure on margins. Voltas sees good potential in Saudi Arabia,
where large orders are being tendered. Management also expects a few metro
rail and airport orders to be given out in Hong Kong. In Qatar, the company has
been mandated to step up execution in the ~Rs9bn Cidra Medical project, and is
expected to be completed over the next 15 months. Management expects
additional resource mobilization in the execution to compress margins to ~7.5%-
8% in this segment. The company is expecting the Rohini subsidiary to achieve
EBIT breakeven in FY12.
Engineering Products — Voltas expects textile machinery and the mining &
construction segments to post robust growth. The company believes that with the
hiving off of the forklift business to the Kion JV, ~17%-18% margins in this
segment are sustainable.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Voltas (VOLT.BO; Rs162.25; 2M)
Takeaways from Mumbai — Voltas presented at the Citi India Investor
Conference in Mumbai. Below are key takeaways.
What's New: Unitary Cooling Products — The company is expecting slower
growth in this segment in FY12 due to weak sales in April and the early advent of
the monsoons. However, management indicated that Voltas has been growing
faster than the market and has been continually gaining market share (currently
~17%). Voltas and its competitiors have rolled back recent price hikes.
Electromechanical Projects — Voltas has an order book of ~Rs49bn (~Rs20bn
domestic). With the exception of ~Rs2bn metro rail order, the domestic orders
are executable over 12-13 months. Rising competitive intensity in the Middle
East is putting pressure on margins. Voltas sees good potential in Saudi Arabia,
where large orders are being tendered. Management also expects a few metro
rail and airport orders to be given out in Hong Kong. In Qatar, the company has
been mandated to step up execution in the ~Rs9bn Cidra Medical project, and is
expected to be completed over the next 15 months. Management expects
additional resource mobilization in the execution to compress margins to ~7.5%-
8% in this segment. The company is expecting the Rohini subsidiary to achieve
EBIT breakeven in FY12.
Engineering Products — Voltas expects textile machinery and the mining &
construction segments to post robust growth. The company believes that with the
hiving off of the forklift business to the Kion JV, ~17%-18% margins in this
segment are sustainable.
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