Voltas share price rises over 4%; Motilal Oswal reinitiates coverage on stock, sees 15% upside potential

livemint.com:

Voltas share price rose over 4 per cent in morning trade on BSE on Wednesday as domestic brokerage firm Motilal Oswal Financial Services reinitiated coverage on the stock with a buy rating, pegging the target price of ₹1,000, implying a 15 per cent upside potential in the stock. "We reinitiate our coverage on Voltas with a buy rating and a target price of ₹1,000 premised on 40 times FY25E earnings per share (EPS), (similar to last 10 years’ one-year forward average price-to-earnings ratio (P/E) multiple, before losses of Voltbek), and ₹38 for Voltbek," said Motilal Oswal. The stock opened at ₹893.45 against the previous close of ₹866.50 and rose 4.10 per cent to hit the intraday high of ₹902.05 in trade so far.

Around 10:30 am, the stock was 3.40 per cent up at ₹896 on BSE. Voltas share price has seen strong traction in the last few months. It has gained about 11 per cent in the last three months.

Equity benchmark Sensex has gained nearly 5 per cent in the same period. Brokerage firm Motilal Oswal believes Voltas will maintain its leadership position in the room air conditioners (RAC) segment. "Voltas is a market leader in the room air conditioners segment.

Its share had gradually risen to 25.2 per cent in FY21 from 20.8 per cent in FY15, before declining to 23.4 per cent and 21.6 per cent in FY22 and FY23, respectively. We estimate Voltas to lead the RAC segment with a market share of 21-22 per cent in FY24/25," said Motilal Oswal. The brokerage firm pointed out that the losses of Voltbek (Voltas Beko) continue but there is strong traction in revenue.