As the summer fades away and the monsoon lingers longer than usual, brokerage houses have flagged some concerns about AC maker Voltas. The inventory pile-up and a decrease in sales across segments are weighing on investor sentiment. The share price of Voltas is down 25% so far in 2025, and even over the last 1 year, it’s declined nearly 29%. But the pain may increase further. Key brokerage houses predict as much as 28% downside from current levels.
What’s the right strategy for the Voltas stock now? Here is how brokerages are mapping the next 12 months for this AC maker-
Nuvama on Voltas: Higher base effect a concern
Nuvama Institutional Equities maintained its ‘Reduce’ rating on Voltas, with a target price of Rs 1,070, a downside of 28% from current levels. The trend of lower sales across key categories is likely to continue in the second quarter of FY26. However, a higher base of last year will also add to the drag on growth.
“However, with GST rate cuts and upcoming festivals, Q3FY26 is likely to report pent-up demand,” said Nuvama.
The company is focusing on margin management and making clear and deliberate, speedy steps to build an efficient cost base and expects benefits to accrue over the coming quarters.
The upcoming BEE change (January 1, 2026) may drive some restocking, as per Voltas, though more clarity would emerge only by the end of October 2025. A BEE change is a shift in the energy efficiency (BEE star ratings) assigned by the Bureau of Energy Efficiency (BEE) of India, often requiring a decrease in star ratings due to updated standards or a downgrade for certain AC types, leading to increased energy consumption and potentially higher electricity bills for older models.
Elara Capital on Voltas: Inventory concerns
Elara Capital downgraded Voltas to a ‘Reduce’ rating from ‘Accumulate’, with a target price of Rs 1,360, implying a downside of 4%.
Plus, the brokerage house cut the FY26 EPS estimates by 17% due to weak sales in the first half of FY26, along with margin pressures. However, Elara raised FY27 and FY28 EPS by 2% each on higher sales from the GST push.
Although to price in the effect of the GST rate cut, the brokerage house has raised the target price to Rs 1,360 from Rs 1,280, along with the market leadership of Voltas in RAC (room air conditioner) and pricing remaining intact despite lower-than-expected demand to date.
Nonetheless, Voltas’ management expects a sharp contraction in the room air conditioners (RAC) segment in Q2FY26, due to lukewarm Summer demand and the GST rate cuts announcement, leading to deferrals in customer demand to Q3FY26.
“We expect this to be a drag on margin in Q2. The Bureau of Energy Efficiency (BEE) norms change may result in a cost increase of 3-5%, resulting in Voltas looking to liquidate inventory by November,” said Elara Capital.
JM Financial on Voltas: Structural weakness
However, JM Financial has upgraded the rating to ‘Add’ from ‘Hold’ with a target price of Rs 1,495, implying an upside of 5%. The upgrade came despite a challenging Q2 due to unfavourable weather, high channel inventory, and deferred purchases in anticipation of a GST cut. Also, the AC prices are likely to see a GST-led decline of 7-8%, but consumer reaction to these cuts remains a grey area. Discussions on stocking prior to the change in energy rating norms are on, but remain contingent upon channel inventory normalising through the festive season.
Further, Voltas’ market share has declined from 22% to 18%, given high competition, and while Voltas’ strategy to regain market share includes a combination of cost leverage, channel presence and expansion of the product portfolio, this structural weakness has persisted for a while.