MOSL: VOLTAS (Buy)-RAC thriving in spite of intense competition
Voltas: RAC thriving in spite of intense competition
(VOLT IN, Mkt Cap USD3.2b, CMP INR679, TP INR785, 16% Upside, Buy)
US-China trade war eases margin pressure on UCP segment
According to Voltas’ (VOLT) management, the company is benefiting from the fallout in the US-China trade war. Due to high inventory build-up in China, VOLT was able to avail high discounts, which more than offset the import duty increase. Thus, based on the present situation, it is confident of achieving an 11% EBIT margin in the UCP segment without any price hikes.
New BEE norms not to be implemented in Jan’20
The BEE rating change for air conditioners (ACs) is deferred by a year to Jan’21. However, industry has made representation that a continuous energy rating change does not make the desired impact as it results in price increases and consequently the shifting of customers to lower energy level products.
Voltas is an air conditioning company based in India. Co. offers engineering solutions for industries in areas such as heating, ventilation and air conditioning, refrigeration, electro-mechanical projects, textile machinery, mining and construction equipment, water management & treatment, cold chain solutions, building management systems, and indoor air quality. Co. is principally active in the management and execution of electro-mechanical projects and the installation and servicing of diverse technology-based systems. Co.'s operations are organized along three business segments: Electro-Mechanical Projects & Services; Engineering Products & Services; and Unitary Cooling Products.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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