Shares of Voltas Ltd gained after three sessions of fall today as brokerage Jefferies assigned a buy call to the large cap stock. It maintained its target price of Rs 1050 on the stock, an upside of 18.34% to the previous close. On the other hand, Goldman Sachs has assigned a sell call to the stock with a target price of Rs 840. Voltas stock climbed 2.09% to Rs 905.75 against the previous close of Rs 887.20 on BSE. The large cap stock has lost 28.48% in a year but gained 12.37 per cent in 2023.
Total 0.21 lakh shares of the firm changed hands amounting to a turnover of Rs 1.86 crore on BSE. The market cap of the firm rose to Rs 29,758 crore on BSE.
The stock hit a 52-week high of Rs 1,347.75 on April 7, 2022 and a 52-week low of Rs 737.60 on January 27, 2023.
In terms of technicals, the relative strength index (RSI) of Voltas stands at 63, signaling it’s neither oversold nor overbought. Voltas stock has a one-year beta of 1.1, indicating very high volatility during the period. Shares of Voltas are trading higher than the 5 day, 20 day, 50 day and 100 day moving averages but lower than 200 day moving averages.
Brokerage firm Jefferies said FY24e should see both AC and Engg sections of Voltas being in a sugary spot and Voltas is still 33% below its 2022 peak driven by market share and margin decline seen in 4QFY22.
“AC margins should close at 9% in FY23E against 11-12% band of earlier years. Voltas has recovered market share from 19% exit run-rate of March 2022 to 23-24%, albeit at lower margins. The peak share price reflected both market share and margin benefits. Since market share has recovered, we believe the stock should retrace close to half the journey left to its peak, with the balance requiring confidence building up in annual margins improving to 10% plus again sustainably. We maintain our FY24E-25E EPS and our price target of Rs 1,050, based on 35 times PE Sept 24E, a 15% discount to the seven-year average of 41 times,” said Jefferies.
On the other hand, Goldman Sachs said the stock has risen 15% in the last 15 days on newsflow around an early onset of summer in India. “Voltas stock tends to outperform during onset of summer. Also, even during peak warm years, industry growth has remained at a CAGR of 6-8% over last 10-15 yrs,” it added.
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