Voltas Q4 profit surges on strong cooling product demand

Shares of Voltas are on fire today, rallying over 11%, after the Tata Group company impressed the Street with its better-than-expected January-March quarter performance.

On Friday, the company reported a 12.52% increase in its consolidated net profit at Rs 159.50 crore in the fiscal fourth quarter to March 2020.
Its consolidated net profit was Rs 141.74 crore in the January-March quarter of the last fiscal

Revenues grew 1.4% notwithstanding the lost sales of cooling products in March.

Although, it’s business suffered due to the lockdown in the country, revenues at the cooling products division grew 20% on year while Voltas maintained market leadership in the room air conditioner (AC) business.

Profit before exceptional items and tax was significantly higher by 32%, at Rs 219 crore as compared to Rs 166 crore in the corresponding quarter last year.

Its total expenses were at Rs 1,911.86 crore in Q4 FY2019-20 as against Rs 1,935.09 crore, down 1.2%.

Voltas’ revenue from ‘unitary cooling products for comfort and commercial use’ was up 20.17% at Rs 1,198.86 crore as against Rs 997.57 crore of Q4 FY2018-19.

However, ‘electro-mechanical projects and services’ segment revenue was down 17.56% to Rs 804.56 crore as against Rs 976 crore.

While, ‘engineering products and services’ were up 20.81% at Rs 94.80 crore as against Rs 78.47 crore.

Meanwhile, Voltas board has recommended 400% dividend, which is Rs 4 per share on face value of Re 1 per share for the year 2019-20.

Net net we expect Q1FY21 to be a difficult period as the company management has stated that the peak season is almost over and hence growth in current year will be limited and only next year growth should resume again.

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