The whole of last twelve months has been a heartbreak ride for the Voltas’ shareholders has the stock largely moved only one direction-down.
Centralised air conditioners (69 per cent of revenues) and room ACs (30 per cent of revenues) - are both in the dumps. Order book has been lying stagnant since FY08. Voltas’ costs meanwhile are shooting up. Margins in the centralized AC segment stood at 8.2 per cent in Q2FY11. One year later, they have settled in at 0.7 per cent! And this is its main revenue generating segment.
Voltas has naturally been clobbered in the markets. Its stock is down nearly 40 per cent from its 52-week highs. No one seems interested in Voltas just yet. A depressed infrastructure sector outlook is certainly not helping. But Voltas has a strong management and is known for quality. Investors can start accumulating at these distressed valuations.
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