25 May 2017
4QFY17 Results Update | Sector: Capital Goods
Voltas
Sell
BSE SENSEX
30,750
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
Avg Val, INRm
Free float (%)
Financials & Valuations (INR b)
Y/E Mar
2017
2018E
60.3
67.4
Net Sales
5.8
5.9
EBITDA
Adj PAT
5.1
5.3
EPS(INR)
15.5
16.0
30.1
3.6
EPS Gr. (%)
111.8
BV/Sh. (INR) 100.0
RoE (%)
18.0
15.1
RoCE (%)
16.5
15.0
30.9
29.7
P/E (x)
4.8
4.3
P/BV (x)
S&P CNX
9,510
VOLT IN
331
89.3 / 1.4
484 / 287
11/41/22
570
69.7
CMP: INR476
TP: INR400(-16%)
Results above expectations; JV with Arcelik – a medium-term positive
Results above expectations:
4QFY17 revenues increased 10% YoY to
INR20.4b (est. of INR19.3b). EBIDTA increased 23% YoY to INR2.2b (est. of
INR1.9b), with the margin expanding 120bp to 10.9% (est. of 10.0%). Adj.
net profit rose 46% YoY to INR2.0b (est. of INR1.4b).
UCP sales grew 28% YoY to INR10.9b,
led by early onset of summer. VOLT
remained the market leader, with a share of 21.4%. EBIT margin was stable
at 16.4%. EMP revenue declined 9% YoY to IN8.3b, led by slower-than-
expected progress in some projects. EBIT margin for the segment expanded
250bp YoY to 5.7%, led by closure of low-margin legacy orders and
execution of better-margin new orders. Management has guided for 6%
EBIT margin for FY18.
‘Voltas Beko’ JV to manufacture and sell consumer durables products:
VOLT has entered into a joint venture with Arcelik to manufacture and sell
white good products (refrigerator, washing machine, microwave oven, etc.)
under the brand name of ‘Voltas Beko’. The JV intends to invest USD100m
to establish a manufacturing and distribution network in India. The JV
expects to roll out the first set of products in 2HFY18.
Maintain Sell; revise TP to INR400:
We raise estimates for FY18/19 by 7%
each to factor in the beat in 4QFY17, as we build in higher margins in the
UCP segment. Our cautious view is driven by: a) threat to margins from
increasing competition in AC segment, b) industry convergence to
inverters, where Voltas has a weak share and c) inventory destocking prior
to GST implementation and BEE rating changes in January 2018.
(INR Million)
FY16
FY17
FY16
FY17
FY17
2Q
3Q
4Q
1Q
2Q
3Q
4Q
4QE
10,401 12,659 18,554 18,500 9,672 11,805 20,351 57,198 60,328 19,305
5.6
33.1
24.5
18.7
-7.0
-6.7
9.7
10.4
5.5
2.2
645
563 1,808 1,995
687
890 2,219 4,330 5,791 1,922
-17.0
-1.9
26.5
52.0
6.4
58.0
22.7
5.6
33.8
3.7
6.2
4.4
9.7
10.8
7.1
7.5
10.9
7.6
9.6
10.0
64
65
75
66
63
60
56
264
245
79
33
37
54
48
33
22
58
158
160
51
477
249
393
357
658
597
386 1,367 1,998
339
0
-22
-268
-9
0
0
-2
106
11
-
1,025
732 2,339 2,248 1,249 1,405 2,493 5,381 7,395 2,130
378
195
671
651
505
437
496 1,696 2,089
795
36.9
26.7
28.7
28.9
40.4
31.1
19.9
31.5
28.2
37.3
647
573 1,642 1,576
697
815 2,005 3,685 5,114 1,416
28.9
-46.6
37.6
53.7
7.8
42.2
22.1
-5.7
38.8
-19.7
647
551 1,375 1,567
697
815 2,003 3,580 5,103 1,416
29.5
-12.3
17.7
52.8
7.8
47.9
45.7
5.9
42.6
-4.6
35,990 35,140 39,140 44,170 42,520 41,960 43,210 39,140
-
2,010 4,960 9,590 9,500 3,820 4,500 4,660 22,500
9,180
1.3
1.3
0.8
1.4
1.1
1.5
1.5 1.4
1.6
Var.
Vs Est
5%
15%
2019E
75.5
6.7
6.0
18.1
13.2
125.2
15.3
15.1
26.3
3.8
Estimate change
TP change
Rating change
Quarterly Performance (Consolidated)
Y/E March
Sales
Change (%)
EBITDA
Change (%)
As of % Sales
Depreciation
Interest
Other Income
Extra-ordinary Items
PBT
Tax
Effective Tax Rate (%)
Reported PAT
Change (%)
Adj PAT
Change (%)
Order Book
Order Intake
BTB - TTM basis (x)
E: MOSL Estimates
1Q
15,585
-11.3
1,313
-0.4
8.4
59
34
248
0
1,468
452
30.8
1,025
-7.0
1,025
-7.9
40,390
5,940
1.8
17%
42%
41%
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
Ankur Sharma
(Ankur.VSharma@MotilalOswal.com); +91 22 6129 1556
Amit Shah
(Amit.Shah@MotilalOswal.com); +91 22 6129 1543

Voltas
Voltas enters white goods space through JV with Arcelik to be named
“Voltas Beko”
Voltas has made entry into white goods space by entering into JV with ARdutch
B.V. (a subsidiary of Arçelik A.S.; part of the Koç Group – Turkey’s largest
industrial and services group). It will be an equal partnership joint venture.
The proposed JVC will leverage the strong brand presence and wide sales and
distribution network of Voltas whereas Arçelik will bring to the JVC its strong
R&D and manufacturing prowess, in addition to a wide product range and global
sourcing capabilities.
The proposed JVC will launch refrigerators, washing machines, microwaves and
other white goods / domestic appliances in India.
The JVC will have an equity capital of USD 100 million, and Tata Investment
Corporation Limited (TICL) and Koç Holding (KOÇ) will also hold 1% equity stake
each, in the new Joint Venture.
A manufacturing facility will be set up in the country, and the JVC will also
source products from Arçelik’s global manufacturing facilities and vendor base.
Beko, the global brand of Arçelik A.Ş. has been the fastest growing home
appliances brand of Europe for the past 7 years.
Brief about Arcelik
Arçelik A.Ş. offers products and services around the world with its 30,000
employees, 18 production facilities in 7 countries (Turkey, Romania, Russia, China,
South Africa, Thailand and Pakistan), its 34 sales and marketing offices in 32
countries and its 11 brands (Arçelik, Beko,Grundig, Blomberg, ElektraBregenz, Arctic,
Leisure, Flavel, Defy, Altus and Dawlance) serving products and services in 145
countries. As the third largest home appliances company in Europe, the
consolidated turnover of Arçelik A.Ş. was TRY 16.1 billion (USD 4.5 billion) in 2016
Exhibit 1:
Product portfolio
Appliances
•
•
•
•
•
•
•
•
Refrigerators
Freezers
Washing machines
Dryers
Dishwashers
Ovens
Hobs
Hoods
Microwave oven
•
•
•
•
•
•
•
Consumer
Electronics
TVs
Home theatre systems
Hi-Fi systems
Portable audio systems
Dect & mobile phones
Notebooks & desktop
PCs
POS cash register
•
•
•
•
HVAC
Air conditioners
Combi boilers
Water heaters
Room heaters
Other
Small Household
Appliances
•
Vacuum cleaners
•
Kitchen
appliances
•
Personal care
•
Garment care
•
Steam cleaners
•
Fans
•
Warming
drawers
•
Water dispensers
& water
filtration
Other
Hermetic
compressors
Industrial
motors
Appliances
motor pumps
Kitchen
Furniture
•
•
•
•
•
•
Source: Company, MOSL
25 May 2017
2

Voltas
Exhibit 2: Brief Financials of Arcelik
Revenue
Gross Profit
margin
EBITDA
margin
EBIT
margin
PBT
margin
Net Income
margin
2016
16.1
5.3
33.2
1.8
11
1.3
8.3
1.2
7.5
1.3
8.1
2015
14.2
4.5
32
1.5
10.8
1.2
8.2
0.8
5.5
0.9
6.3
2014
12.5
4
31.8
1
7.7
1
8
0.7
5.8
0.6
5.1
(Turkish Lira b)
2013
11.1
3.4
30.6
1.1
9.9
1.2
10.8
0.75
6.8
0.62
5.6
2012
10.6
3.04
28.7
0.72
6.8
0.76
7.2
0.62
5.8
0.55
5.2
Source: Company, MOSL
Exhibit 3: Segmental bifurcation
TL b
Consolidated
Revenue
Gross Profit
Gross Profit %
White Goods
Revenue
Gross Profit
Gross Profit %
Consumer Elect
Revenue
Gross Profit
Gross Profit %
Other
Revenue
Gross Profit
Gross Profit %
2016
16.1
5.3
33.2
11.7
4.1
35.3
2.3
0.6
27.9
2.1
0.6
26.8
2015
14.2
4.5
32
10.3
3.6
34.7
2
0.4
22
1.9
0.5
27.6
Source: Company, MOSL
Strong sales and dealer network
Around 3,000 exclusive dealers in Turkey for Arçelik and Beko brands on long-
term relationship
Arçelik manages marketing, store formats and dealer training
10 regional after-sales service centers. After-sales services includes delivery,
assembly, installation, repair and general customer support processes. It has
widest after-sales service network in Turkey, +600 exclusive after-sales service
points
International sales account for c.60% of revenues
3rd largest appliance company in Europe with Beko as 2
nd
best brand in Europe
Leading positions in core markets
Third largest player in EMEA region and Leading manufacturer in South Africa
and Pakistan. Refrigerator plant in Thailand has started mass
Our ball park analysis of the recently announced JV suggests that in FY19 if the new
JV is able to garner 5% market than we can see EPS accretion of 4%.
25 May 2017
3

Voltas
Exhibit 4: Voltas -Beko JV to contribute 4% of FY19 EPS
Total market size (CY15)
Washing Machines
Refrigerators
Microwaves
Total market opportunity
Description
Sales for the JV
EBITDA (Assume 10% margin)
Less: Depreciation
PBT
Tax
PAT
Share for Voltas(49% stake)
EPS accretion in FY19
EPS for FY19
EPS accretion (%)
INRm
122,000
93,400
25,476
240,876
INRm
12,044
1,204
-390
814
-285
529
259
0.8
18.1
4%
Source: Company, MOSL
Results above estimates largely led by better operational performance
4QFY17 performance above expectations:
4QFY17 revenue increased 10% YoY
to INR20.4b (est. of INR19.3b). EBIDTA increased 23% YoY to INR2.2b (est. of
INR1.9b), with margin expanding 1200bp to 10.9% (est. of 10.0%). Adj. net profit
rose 46% YoY to INR2.0b (est. of INR1.4).
UCP sales register 28% growth YoY to INR10.9b
led by early onset of monsoon.
VOLT remained the market leader with a share of 21.4%. EBIT margin stood
stable at 16.4%. EMP revenue declined 9% YoY to IN8.3b, led by slower than
expected progress in certain projects. EBIT margin for the segment expanded
250bp YoY to 5.7%, led by closure of a low margin legacy orders and execution
of better-margin new orders.
EMP revenue declined 9% YoY to IN8.3b, led by slower than expected progress
in certain projects. EBIT margin for the segment expanded 250bp YoY to 5.7%,
led by closure of a low margin legacy orders and execution of better-margin new
orders. Management highlighted that the business environment in the India has
started witnessing recovery with government investments in urban infra and
transportation, electrical distribution, water treatment and smart city
development and metro ordering. Voltas expects margins are to improve from
FY18 onwards.
Engineering products
revenues registered growth of 15% YoY for 4QFY17
however for FY17 revenue declined by 10% on account of business conditions
both in textile and mining machinery businesses. In FY17, EBIT margins declined
100bps YoY to 29%.
25 May 2017
4

Voltas
Exhibit 5: Revenue growth led by strong growth in UCP
segment performance
Revenues (INR b)
Growth (%)
Exhibit 6: EBITDA improvement led by positive closure and
execution of better margin projects in EMP segment
EBITDA (INR b)
EBITDA (%)
Source: Company, MOSL
Source: Company, MOSL
Exhibit 7: Quarterly performance (INR m)
Segmental Revenues
EMP & Services
Engineering products and services
Unitary cooling business
Others
Total
Segment PBIT
EMP & Services
Engineering products and services
Unitary cooling business
Others
Total PBIT
Segment PBIT (%)
EMP & Services
Engineering products and services
Unitary cooling business
Others
Total PBIT
Capital Employed
EMP & Services
Engineering products and services
Unitary cooling business
Others
Unallocated
Total Capital Employed
2QFY16
6,208
961
3,141
289
10,599
107
340
355
36
837
1.7
35.3
11.3
12.3
7.9
5,802
747
3,818
231
12,261
22,858
3QFY16
7,219
1,114
4,345
334
13,011
-86
247
505
40
705
-1.2
22.1
11.6
11.8
5.4
6,336
847
3,962
322
11,981
23,448
4QFY16
8,186
927
8,591
1,056
18,759
278
302
1,391
92
2,064
3.4
32.6
16.2
8.7
11.0
6,796
797
1,639
573
14,405
24,210
1QFY17
5,802
691
11,956
-
18,450
108
193
1,779
2,080
1.9
27.9
14.9
11.3
7,905
711
(1,485)
-
23,230
30,360
2QFY17
5,432
751
3,542
-
9,725
54
304
409
0
766
1.0
40.4
11.5
7.9
7,319
816
2,479
-
19,912
30,526
3QFY17
7,026
807
4,111
0
11,944
273
200
434
0
908
3.9
24.8
10.6
7.6
7,289
610
2,974
-
20,292
31,165
4QFY17
8,290
1,068
10,860
0
20,218
477
259
1,781
0
2,516
5.7
24.2
16.4
12.4
FY17
26,550
3,318
30,469
0
60,337
849
956
4,403
0
6,208
3.2
28.8
14.5
10.3
6,238
6,238
544
544
2,322
2,322
0
0
25,248
25,248
34,351
34,351
Source: MOSL, Company
Order inflow driven by domestic project business; book-to-bill ratio at 1.6x:
VOLT’s order inflow for 4QFY17 stood at INR10.7b, up 10% YoY. Order inflow
continues to be supported by orders wins from the domestic market. The
company continues to selectively book projects above the threshold margins of
4-5%. VOLT’s order book stands at INR43b, up 10% YoY, while its book-to-bill is
at 1.6x. Management expects the margins to revert back to 5% levels in FY18
from current 3% levels.
25 May 2017
5

Voltas
Exhibit 8: Order book improves YoY despite prevailing
challenging environment
Order Book (INR b)
Y-o-Y growth (%)
Exhibit 9: Project business EBIT margins witness
improvement 230bps improvement YoY
Revenues (INR b)
PBIT (%)
Source: MOSL, Company
Source: MOSL, Company
Capital employed in the EMP has remained stable at INR6.2b. Asset turn has
stood stable on QoQ basis at 3.6x in 4QFY17. We understand that the normative
asset turn in the business stands at ~5x, however given that a substantial part of
the capital employed continue to be locked as claims on legacy projects asset
turn stands subdued.
Exhibit 11: CE has declined on QoQ basis
Domestic (%)
Capital Employed (INR b)
Asset Turn (x)
Exhibit 10: Order book composition
International (%)
53 54 58 60 52 54 56 57 60 53 52 50 52 61 52 46 51 56 59
47 46 42 40 48 46 44 43 40 47 48 50 48 39 48 54 49 44 41
Source: MOSL, Company
Source: MOSL, Company
Voltas maintains no 1 position in UCP business
Voltas has been able to maintain its leadership in the business with 21.4%
market share in 4QFY17.
Capital employed for Voltas which had increased from INR24b in 4QFY16 to
INR34b in 4QFY17 on account of higher inventory in the UCP segment and also
higher unallocated capital employed.
Voltas has been able to sell 1,70,000 air coolers in FY17- its second year of
entering the segment.
Exhibit 13: Market share stands steady at 21.4%
Market Share (%)
Exhibit 12: EBIT margins remains stable on YoY basis
Revenues (INR b)
PBIT (%)
Source: MOSL, Company
Source: MOSL, Company
25 May 2017
6

Voltas
Valuation and view
Maintain Sell; revise TP to INR400.
We raise estimates for FY18/19 by 7% each
to factor in the beat in Q417 as we build in higher margins in the UCP segment.
Our cautious view is driven by: a) Threat to margins driven by increasing
competition in the room air conditioner segment, b) Industry convergence to
inverters where Voltas has weak share, c) Inventory destocking prior to GST
implementation and rating change in Jan’18.
Exhibit 14: Change in estimates
Description
Sales
EBITDA
Margins(%)
PAT
EPS
New Estimates
FY16
FY17e
60,328
67,419
5,791
5,925
9.6%
8.8%
5,103
5,297
15.4
16.0
FY18e
75,525
6,668
8.8%
5,994
18.1
Old Estimates
FY17e
FY18E
67,200 75,700
5,300 6,100
7.9%
8.1%
4,900
5600
14.9
16.9
Change in estimates
FY17e
FY18e
0%
0%
12%
9%
0.9%
0.8%
8%
7%
7%
7%
Source: MOSL, Company
Concall Highlights
To launch products under "Voltas Beko" brand by Diwali this year (October, 2017);
target is 10% of the INR350b consumer durables market
Proposed entity will launch refrigerators, washing machines, microwaves and
other white goods / domestic appliances in a phased manner - extension of the
Voltas brand into durables
Went in a JV since the R&D, product range, global supply chain of Arcilek can be
used - Arcilek wanted to come into India and can partner with Voltas; will be a
strong business in coming years
Manufacturing facilities will be set up in the country, leveraging the
technological excellence and global capabilities of our Joint Venture partner
Voltas and Beko to be cobranded under 'Voltas - Beko' and will bring to India
White goods Rs35,000cr and 10-12% with 20m units, ambition to take a 10%
share in a reasonable time
INR6.8b of investment will be invested over a period of time and can invest
even more; Initially will not be manufacturing but seed with imported products
and distribute with the existing infrastructure
Product launches will be done by Diwali (Oct - November, 2017) with imported
products
Projects seeing green shoots of recovery – expect margins of 6% in FY18
Domestic
- Focus more on Govt. projects / externally funded investments has
helped the domestic projects business to remain sufficiently protected against
the many issues surrounding the private sector, Sentiment is turning +ve; mostly
government driven investments and not much by private sector
Overseas projects:
Barring a couple of arbitrations, we have diligently ensured
closure of several legacy projects - have focused on speedy settlement and
financial closure of older projects
UCP segment continues to see good growth in FY18; margin at risk of high
advertising costs
25 May 2017
7

Voltas
Except for a couple of demonetization impacted months (Nov and Dec 2016),
the year has generally been good for the industry at large, supported as it was
by hot weather
Margin - FY17 margin at 14% and is quite high vs. industry and could trend
down with higher advertising costs
Voltas Fresh Air Coolers sold approx. 170,000 units. We now have 22 well
accepted SKUs in the market and a good value proposition supported by better
features, competitive pricing, deeper distribution network, and clear
communication
CY17 is seeing hot weather - industry grew by 31% and Voltas by 33% YoY in
FY17, Expect reasonable growth for FY18.
Exhibit 15: Operating Metrics
INR M
Order Book
Domestic
International
YoY
Order Inflows
Segmental Revenues
Electro mechanical projects
Engineering Products
Unitary Cooling products
Others
Total Revenues
EMP, % YoY
Engg Products, % YoY
UCP, % YoY
Segmental PBIT
Electro mechanical projects
Engineering Products
Unitary Cooling products
Others
Total PBIT
EPS (INR/sh)
NWC (Days)
EPS Composition (INR/sh)
Electro mechanical projects
Engineering Products
Unitary Cooling products
FY12
42,920
19,560
23,360
-12.2%
25,882
31,832
4,121
15,388
427
51,768
4.7%
-26.9%
-1.4%
-1,042
687
1,298
42
985
9.5
55.9
FY13
37,190
21,610
15,580
-13.4%
26,265
31,995
4,311
18,356
502
55,163
0.5%
4.6%
19.3%
-491
821
1,655
3
1,988
5.9
53.4
FY14
36,120
20,200
15,920
-2.9%
22,410
26,924
4,482
20,524
520
52,451
-15.8%
4.0%
11.8%
-396
1,414
2,567
6
3,592
6.8
52.5
6.8
-2.0
2.7
6.1
FY15
38,930
20,220
18,710
7.8%
22,380
22,085
3,601
25,105
661
51,452
-18.0%
-19.7%
22.3%
231
1,081
3,491
70
4,874
10.2
40.7
10.2
-0.7
2.4
8.4
FY16
39,140
25,441
13,699
3.6%
20,110
28,288
3,706
25,209
0
57,088
28.1%
2.9%
0.4%
550
1,127
3,381
0
5,058
11.0
40.8
11.0
0.4
2.4
8.2
FY17E
45,371
30,247
15,124
15.7%
24,531
26,550
3,318
30,469
0
65,626
-6.1%
-10.5%
20.9%
849
956
4,403
0
6,208
15.4
35.5
15.4
2.8
2.0
10.7
FY18E
46,772
31,181
15,591
9.6%
27,438
29,300
3,484
35,039
0
80,352
10.4%
5.0%
15.0%
1,523
1,003
4,713
0
7,239
16.0
30.9
16.0
3.2
2.1
10.7
FY19E
51,710
34,473
17,237
13.9%
32,425
32,060
3,658
40,295
0
94,789
9.4%
5.0%
15.0%
1,731
1,054
5,420
0
8,204
18.1
35.9
18.1
3.6
2.2
12.3
Source: Company, MOSL
25 May 2017
8

Voltas
Financials and Valuations
Income Statement
Y/E March
Total Revenues
Change (%)
Raw Materials
Staff Cost
Other Expenses
EBITDA
% of Total Revenues
Other Income
Depreciation
Interest
Exceptional Items
PBT
Tax
Rate (%)
Adjusted PAT
Extra-ordinary Income (net)
Reported PAT
Change (%)
Adj. Consolidated PAT
Change (%)
Balance Sheet
Y/E March
Share Capital
Reserves
Net Worth
Minority Intetest
Loans
Deferred Tax Liability
Capital Employed
Gross Fixed Assets
Less: Depreciation
Net Fixed Assets
Capital WIP
Investments
Goodwill
Curr. Assets
Inventory
Debtors
Cash & Bank Balance
Loans & Advances
Current Liab. & Prov.
Creditors
Other Liabilities
Net Current Assets
Application of Funds
2013
55,310
6.7
41,670
6,325
4,934
2,380
4.3
901
278
326
121
2,798
728
26.0
2,070
-
2,070
27.8
1,955
(37.5)
2014
52,660
(4.8)
38,543
5,947
5,515
2,656
5.0
1,002
248
225
215
3,399
941
27.7
2,458
-
2,458
18.7
2,238
14.5
2015
51,831
-2
35,974
5,899
5,857
4,100
7.9
1,087
280
233
462
5,136
1,276
25
3,860
0
3,860
57
3,381
51
2016
57,198
10
40,871
6,351
5,646
4,330
7.6
1,367
264
158
289
5,275
0
0
3,642
0
3,931
2
3,931
16
2017
60,328
5
42,359
6,184
5,994
5,791
9.6
1,998
245
160
11
7,395
2,089
28
5,114
0
5,114
30
5,114
30
2018E
67,419
12
48,521
6,732
6,240
5,925
8.8
2,066
252
110
0
7,629
2,212
29
5,317
0
5,317
4
5,297
4
(INR Million)
2019E
75,525
12
55,285
7,035
6,537
6,668
8.8
2,299
262
93
0
8,611
2,497
29
6,014
0
6,014
13
5,994
13
(INR Million)
2019E
331
41,069
41,400
285
1,709
(198)
43,197
5,444
3,529
1,916
-
22,679
723
54,846
11,355
18,204
10,412
1,170
37,009
22,901
14,108
17,837
43,197
2013
331
15,926
16,256
118
2,612
(222)
18,765
4,678
2,568
2,110
0
4,074
888
38,352
9,784
21,927
3,498
3,142
26,658
17,191
9,186
11,694
18,766
2014
331
17,862
18,193
138
2,629
(239)
20,721
4,198
2,113
2,086
18
7,320
798
36,974
9,010
22,039
2,818
3,108
26,476
16,267
10,208
10,499
20,721
2015
331
20,690
21,021
161
1,217
(349)
22,049
4,114
2,223
1,891
44
10,939
798
34,844
8,671
21,051
2,516
2,606
26,466
15,414
11,051
8,378
22,050
2016
331
27,780
28,111
267
2,707
(311)
30,775
4,805
2,770
2,035
-
19,458
723
35,863
7,247
13,672
1,855
935
27,610
17,488
10,122
8,253
30,775
2017
331
32,735
33,066
285
1,709
(198)
34,863
5,018
3,015
2,004
-
22,679
723
38,808
9,070
14,541
3,314
935
29,628
19,946
9,682
9,180
34,863
2018E
331
36,645
36,976
285
1,709
(198)
38,773
5,231
3,266
1,965
-
22,679
723
47,204
10,136
16,250
7,539
1,045
33,960
21,366
12,594
13,244
38,773
25 May 2017
9

Voltas
Financials and Valuations
Ratios
Y/E March
Basic (INR)
Adj EPS
Cash EPS
Book Value
DPS
Payout (incl. Div. Tax.)
Valuation (x)
P/E
Cash P/E
EV/EBITDA
EV/Sales
Price/Book Value
Dividend Yield (%)
Profitability Ratios (%)
RoE
RoCE
RoIC
Turnover Ratios
Debtors (Days)
Inventory (Days)
Creditors. (Days)
Asset Turnover (x)
Leverage Ratio
Debt/Equity (x)
Cash Flow Statement
Y/E March
PBT before EO Items
Add : Depreciation
Interest
Less : Direct Taxes Paid
(Inc)/Dec in WC
CF from Operations
(Inc)/Dec in FA
Free Cash Flow
Investment in liquid assets
CF from Investments
(Inc)/Dec in Debt
Less : Interest Paid
Dividend Paid
CF from Fin. Activity
Inc/Dec of Cash
Add: Beginning Balance
Closing Balance
2013
5.9
6.3
6.8
49.2
1.6
29.8
12.7
11.1
10.1
0.4
1.5
2.1
12.6
12.4
13.7
145
65
158
2.9
0.2
2014
6.8
7.4
7.5
55.0
1.9
29.2
23.8
34.2
20.0
1.0
2.9
1.1
13.0
12.0
15.0
153
62
164
2.5
0.1
2015
10.2
10.2
11.1
63.6
2.3
23.3
22.6
20.9
18.3
1.5
3.6
1.0
17.2
16.6
28.1
148.2
61.1
161.4
2.4
0.1
2016
11.9
11.9
12.7
85.0
2.6
27.1
42.9
40.0
36.3
2.7
5.6
0.5
14.8
13.9
29.4
87.2
46.2
111.6
1.9
0.1
2017
15.5
15.5
16.2
100.0
3.5
26.2
30.6
29.2
26.7
2.6
4.7
0.7
18.0
16.5
41.8
88.0
54.9
120.7
1.7
0.1
2018E
16.0
16.0
16.8
111.8
3.6
26.2
29.5
28.1
25.4
2.2
4.2
0.8
15.1
15.0
44.7
88.0
54.9
115.7
1.7
0.0
2019E
18.1
18.1
18.9
125.2
4.1
26.2
26.0
25.0
22.1
2.0
3.8
0.9
15.3
15.1
47.2
88.0
54.9
110.7
1.7
0.0
2013
2,798
278
326
(728)
(202)
2,472
(181)
2,291
(957)
(1,139)
399
(326)
(619)
(546)
787
2,710
3,497
2014
3,399
248
225
(941)
98
3,030
462
3,492
(3,247)
(2,785)
17
(225)
(716)
(925)
(679)
3,497
2,818
2015
5,136
280
233
(1,276)
1,425
5,798
58
5,856
(3,619)
(3,561)
(1,412)
(233)
(894)
(2,539)
(302)
2,818
2,516
2016
5,275
264
-
(1,696)
(537)
3,306
(213)
3,093
(8,520)
(8,733)
1,491
-
(988)
4,650
(777)
2,516
1,855
2017
7,384
245
-
(2,089)
533
6,073
(213)
5,860
(3,221)
(3,434)
(998)
-
(1,337)
(1,157)
1,483
1,817
3,315
2018E
7,629
252
-
(2,212)
161
5,829
(213)
5,616
-
(213)
-
-
(1,387)
(1,387)
4,229
3,310
7,539
2019E
8,611
262
-
(2,497)
(1,720)
4,656
(213)
4,443
-
(213)
-
-
(1,570)
(1,570)
2,873
7,539
10,412
25 May 2017
10

Voltas
Corporate profile
Company description
Exhibit 1: Sensex rebased
Voltas (VOLT) is a Tata group company and is India's
largest air conditioning company and is one of the
leading engineering solution provider across GCC
nations as well. VOLT’s business portfolio comprises
of providing HVaC & MEP solutions. VOLT has a
proven track record of delivering MEP / HVaC
solution across iconic projects like Burj Al Arab, F1
track in Bahrain etc. VOLT’s product business
comprises of unitary cooling division, in which VOLT
is the market leader with ~20% market share. Other
product business would include, marketing of
textile machinery.
Exhibit 2: Shareholding pattern (%)
Mar-17
Promoter
DII
FII
Others
30.3
26.5
20.7
22.5
Dec-16
30.3
27.1
22.4
20.2
Mar-16
30.3
29.2
19.5
21.1
Source: Capitaline
Source: MOSL/Bloomberg
Exhibit 3: Top holders
Holder Name
LIFE INSURANCE CORPORATION OF INDIA
FRANKLIN TEMPLETON INVESTMENT FUNDS
HDFC MUTUAL FUND
FRANKLIN TEMPLETON MUTUAL FUND
SBI MUTUAL FUND
% Holding
6.9
4.9
4.6
3.3
1.9
Source: Capitaline
Note: FII Includes depository receipts
Exhibit 4: Top management
Name
Ishaat Hussain
Sanjay Johri
V P Malhotra
Designation
Chairman
Managing Director
Company Secretary
Exhibit 5: Directors
Name
N N Tata
Anjali Bansal
Debendranath Sarangi
R N Mukhija
Name
Vinayak Deshpande
Bahram N Vakil
Nani Javeri
Source: Capitaline
*Independent
Exhibit 6: Auditors
Name
Deloitte Haskins & Sells LLP
N L Bhatia & Associates
Sagar & Associates
Type
Statutory
Secretarial Audit
Cost Auditor
Exhibit 7: MOSL forecast v/s consensus
EPS
(INR)
FY17
FY18
FY19
MOSL
forecast
15.5
16.0
18.1
Consensus
forecast
13.0
14.7
16.2
Variation (%)
18.8
8.6
12.0
Source: Bloomberg
Source: Capitaline
25 May 2017
11

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Voltas
Disclosure of Interest Statement
Analyst ownership of the stock
No
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No
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VOLTAS
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