The company now expects revenue growth of 17-19% for the year, down from its earlier projection of 30.3%. Group revenue growth guidance was cut to 21-23% from 33%, while net profit growth is now seen at just 3-7% compared to 39.2% earlier. Revenue growth for its product business was also revised down to 17-21% from 35%. Management flagged high dealer inventory as a major concern, saying that most contract manufacturers are scaling back production.
Voltas slipped 8% after reporting a 35-40% drop in industry volumes in Q1FY26. Its Q1 results fell short of estimates, with revenue down 20% year-on-year to ₹3,938 crore. EBITDA and net profit each fell 58%, while margins shrank to 4.5% from 8.6%.Nomura maintained a ‘Neutral’ rating on Voltas with a price target of ₹1,317, citing margin risks from rising competition. It cut its FY26 RAC industry growth forecast to 5% from 10% earlier, while keeping FY27/28 growth estimates at 20% and 15% respectively. Voltas’ FY26/27 UCP revenue growth estimates were also lowered to 6% and 24% from 13% and 21%.
Jefferies, however, retained a ‘Buy’ rating with a price target of ₹1,670, saying that despite weaker volumes and mid-season production cuts, Voltas’ market share rose month-on-month, from 16.9% in April to 19.3% in June.
It expects recovery drivers ahead, including an early festive season, the possibility of a second summer, updated BEE ratings, and cost control measures.Voltas currently trades at 36x FY27e PE, 22% below its five-year average.
CLSA kept a ‘Hold’ rating but cut its target to ₹1,170, citing Q1 performance below expectations. The company expects demand recovery from Q3 onwards, though full-year industry volumes could still be flat or down up to 10%.
Other stocks also slipped, with Virtuoso Opto down 6%, Amber Enterprises 4%, Blue Star 3%, Symphony and Havells (Lloyd) 2% each, and E-Pack Durable and Johnson Controls losing 1%.
Why the sell-off?
Analysts cited the early monsoon as a key factor reducing peak summer demand, leading to excess dealer inventory. Many EMS-based AC companies were already trading at high valuations, and recent fundraisings at premium prices have added pressure. Slower growth expectations have further soured sentiment.
Valuations check
|
Company |
3 YR AVG P/E X |
1 yr Fwd P/E x |
|
PG Electro |
41 |
32 |
|
Laps |
46 |
43 |
|
Bluestar |
46 |
51 |
|
Amber |
44 |
52 |
PG Electroplast and Voltas now trade below their three-year averages, while Blue Star and Amber remain above.
