Emkay Reiterates 'Buy' on Voltas, Keeps Target Price at Rs 1,450 Despite Weak Summer Demand

Brokerage firm Emkay Global Financial Services has reiterated its ‘Buy’ rating on Voltas, maintaining a target price of Rs 1,450, even as the company contends with one of the weakest summer seasons in recent years. The optimism is on the back of Voltas’ compelling “valuation comfort”, despite a drop in air-conditioner sales triggered by unseasonal weather and erratic demand trends.

“We reiterate BUY on Voltas and our TP of Rs 1,450, supported by valuation comfort. The company is trading at a one-year forward UCP (Unitary Cooling Products) price-to-sales multiple of around 3.4x, against a 10-year historical average of 3.7x. We reaffirm our view that weather-led disruptions often create compelling entry points,” Emkay noted in a post-analyst meet note.

According to Emkay. Voltas' management flagged a 20–25% decline in secondary sales across the room air-conditioner (RAC) industry during April–May 2025. Elevated channel inventories of 6–8 weeks remain a concern, although early signs of recovery have been observed in parts of North India, a region that contributes up to 40% of Voltas’s UCP business, as per Emkay. 

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Despite sluggish demand, industry players — including Voltas — have avoided large-scale price cuts. Instead, promotional offers and freebies are being used to support sales. Emkay notes that pricing discipline and cost control measures will be crucial in protecting margins through the remainder of the season.

The brokerage firm also downplayed any material risk from the upcoming BEE (star rating) regulatory change in January 2026, noting that while prices may increase by Rs 800–1,000 per unit.
“Voltas is focused on cost optimization to protect profitability,” noted Emkay. 

Emkay further affirmed that Voltas’s diversification efforts — including its Voltas Beko appliance JV and steady orders in its Electro-Mechanical Projects and Services (EMPS) — bolsters its long-term outlook.

“Beko currently houses ~1.6mn capacity, which Voltas is looking to expand; it aims for full localization within the next 12-18M. 10) In the EMPS segment, Voltas’s domestic business is growing, with orders worth ~Rs1-1.5bn secured from Tata Electronics;” highlighted Voltas. 

Emkay also noted that Voltas expects the receivables provision for this business to continue. Voltas has booked Rs180mn for PLI in FY25 (pertaining to FY24 and FY25); for FY26, the PLI would depend on volume targets being met, stated the brokerage firm.

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