It’s been a tough summer for Voltas, not just because of the unexpected rains. The stock has tumbled nearly 30% in 2025 so far, and brokerages are beginning to take a more cautious stance. While Jefferies still maintains a ‘Buy’ rating, it has slashed the stock’s target price. Meanwhile, Nuvama has downgraded it to ‘Hold’ and Nomura sticks to a ‘Neutral’ view.
So what led to a moderation in sentiment around India’s top air conditioning brand? Here’s what the brokerage reports say.
One of the biggest concerns for all three brokerages is the sharp dip in air conditioner sales as a result of unusual weather. According to Nuvama, the RAC (Room Air Conditioner) industry saw a 20% to 25% year-on-year drop in volumes during April and May 2025. Voltas mirrored the same trend, with primary and secondary sales both taking a hit. Similarly, the brokerage firm Nomura added that even though there was a slight improvement in June, “downside risk to our flat y-y industry volume estimate in Q1” remains due to the weak start to the summer season.
Nuvama on Voltas: Downgrades to ‘Hold’, Cuts EPS estimates
Nuvama sees a challenging environment ahead for Voltas, particularly in its core Room Air Conditioner (RAC) business. The firm notes that industry-wide volumes dipped 20% to 25% year-on-year in April and May due to unseasonal rains, with Voltas mirroring this drop. Even though sales picked up in June, inventory pressure remains.
“Channel has 6-8 weeks of inventory at present (similar level for Voltas as well) and is expected to be liquidated in the coming quarter,” Nuvama added.
The brokerage also flagged weak demand in commercial refrigeration and margin pressure due to fixed costs and discounts. While management continues to target market share gains and high single-digit margins, Nuvama is trimming its growth expectations.
“We are cutting FY26E/27E EPS by 8%/5%… Maintain HOLD with a revised SoTP-based target price of Rs 1,190 (earlier Rs 1,250),” the report said.
Nomura on Voltas: Maintains ‘Neutral’, Sees margin risks ahead
Nomura noted concerns about the weather impact and notes that while June brought a slight recovery, the weak start to Q1 could drag the overall numbers. The firm warns of potential downside even to its flat YoY volume assumption for the June quarter.
“We maintain our view that unseasonal rains in April/May… will still imply downside risk to our flat y-y industry volume estimate in Q1,” Nomura stated.
On the margin front, rising competition and discount-led pricing are a concern. The brokerage adds that increased backward integration under the PLI scheme might keep costs elevated, not improve them. For the project business, the outlook is muted with negative revenue growth expected in FY26 and FY27.
Valuation-wise, Nomura calls the stock fairly priced at approx. 35 times FY27F earnings, keeping its target price at Rs 1,290.
“The stock’s current valuation offers a balanced risk-reward trade-off… we maintain our Neutral rating,” the brokerage said.
Jefferies on Voltas: Still a ‘Buy’, But target price trimmed
Jefferies has maintained a ‘Buy’ rating, though it has scaled back the stock’s target price to Rs 1,680 from Rs 1,790.
“Unseasonal rain in May-Jun’25 is estimated to fuel a ~15-20% YoY decline in RAC industry sales,” the brokerage noted, adding that Voltas’s Q1 will reflect this weakness.
It also highlighted that channel inventory is higher than the usual 3-4 weeks, which might affect fresh order flows. However, the firm remains bullish on the longer-term outlook.
“We estimate FY25-28E sales/PAT CAGR at +13%/+20%, led by RAC volumes, margin turnaround in EPC, and improved traction in Voltas-Beko,” Jefferies stated.
Even after the sharp decline in the stock, Jefferies finds valuation compelling. Voltas now trades at 43 times FY26E P/E, which is below its 5-year average, the brokerage pointed out.
Voltas share performance
In the last five days, the share price of Voltas has declined by 2.6%. Over the past one month, the stock has seen a marginal uptick of nearly 1%. Looking at the broader trend, Voltas share price has dropped by 27% in the last six months and declined by 16% on a year-on-year basis. So far in 2025, the stock has fallen by 30%.