Range
Stop Loss
Target
Voltas Ltd (NSE Cash) - BUY
332 - 326
304
385
Weekly Chart
Technical Evidences
The stock has given breakout from a
‘Falling Channel’ on weekly chart in May
2016 and moved higher.
However, the upward move had taken a
pause and stock has seen a decent
correction up to 38.20% retracement levels
of the previous up move from `211 to
`349, which coincides with the ‘Channel
Breakout’ levels.
The ‘RSI’ indicator on weekly chart has
also taken support of the ‘Trendline’ and
turned northwards, indicating strength in
the counter.
Also, the ‘SuperTrend’ indicator on daily
charts turned in to ‘Buy’ mode, which
support our bullish view on the stock.
Thus, the stock can be bought from current
level to a decline up to `326 for a target
of `385 in coming three months. A stop
loss can be placed at ` 304.
Source: Falcon ( Chart time: 14:03 IST on 22/07/2016 )
July 22, 2016
Stock Info
Voltas Ltd.
Growth in UCP segment to continue: Voltas has maintained 20%+ market share
Sector
Capital Goods
in domestic air-conditioning market despite stiff competition from MNC players.
With economic indicators turning favourable, the company’s competitive
Market cap
11,081
positioning should help its UCP segment to report a 19.5% topline and 16.6%
EBIT CAGR, respectively, during FY2016-18E.
Beta
1.4
Gradual recovery in EMP business: In the run-up to the Qatar World Cup 2022
and Dubai Expo 2020, we expect international awarding activity to catch-up from
52 week high/low
349/211
FY2017E onwards. Surge in order book should translate to uptick in execution
(10.7% top-line CAGR during FY2016-18E). With legacy projects completed and
Avg. Daily Volume
17,90,185
contribution of high margin projects kicking-in, we expect segment margins to
expand from 1.4% in FY2016 to 5.0% in FY2018E.
Face Value (`)
1
Strong growth Outlook: On the back of strong 13.3% top-line and
18.1%
bottom-line CAGR during FY2016-18E, we expect Voltas to report strong
16.7%/18.5% RoE for FY2017/18E, respectively. Considering the positive cues,
Shareholding Pattern (%)
case for improvement in business segments’ performances and growth potential,
we expect improved profitability and better investment return ratios, going
forward. We assign
25.0x PE multiple to our FY2018E EPS estimate of
Promoters
30.3
`16.3/share and arrive at price target of `407. Given the upside, we recommend
Buy on the stock.
MF / Banks / Indian Fls
20.5
Company
Sales
OPM PAT EPS Adj. ROE P/E P/BV EV/EBITDA EV/Sales
(` cr)
(%)
(` cr)
(`)
(%)
(x)
(x)
(x)
(x)
FII / NRIs / OCBs
28.1
FY2017E
6,511
7.9
427
12.9
16.7
26.2
4.1
21.7
1.7
Indian Public / Others
21.1
FY2018E
7,514
8.7
538
16.3
18.5
20.8
3.6
17.1
1.5
July 22, 2016
Research Team Tel: 022 - 3935 7600
E-mail: [email protected]
Website: www.angelbroking.com
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Disclosure of Interest Statement
VOLTAS
1. Financial interest of research analyst or Angel or his Associate or his relative
No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives
No
3. Served as an officer, director or employee of the company covered under Research
No
4. Broking relationship with company covered under Research
No
July 22, 2016