Voltas is telling analysts that it may hike AC prices by 3-4% to cover rising input costs

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Voltas is telling analysts that it may hike AC prices by 3-4% to cover rising input costs
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  • Voltas is the biggest player in the Air Conditioners, and it has hinted that it is looking to hike prices, but is waiting for the demand to improve.
  • There is also the fear of the government raising the import duties, pushing the company to hike prices. They are also gradually developing alternative sources of raw material domestically.
  • Voltas management remains confident that it will gain more market share, especially in room air conditioners.
  • Check out the latest news and updates on Business Insider.
India’s top air conditioner manufacturer, Tata Group company Voltas hinted that it might hike the prices to offset the rising commodity prices. However, it is waiting for demand to improve. This decision of hiking the prices may be further expedited by the fear of the Indian government raising the import duty after the recent tensions with China.

The company said it would need a 3-4% price hike after it finds an alternative source of raw material domestically, according to the IIFL Securities report dated December 4.

The management’s confidence may stem from its latest quarterly report, which impressed the street with better performance than its peers like BlueStar, Whirlpool.

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In the second quarter, the company recorded 14% overall volume growth led by a 1% jump in room air conditioners (ACs), 20% in commercial refrigeration products, and 28% in air coolers.

Voltas July-Sep 2021Growth over same period last year
Revenue₹1,650.80 crore10.5%
Profit₹79.66 crore-25.7%

Even with the possible price hikes, Voltas management remains confident that it will gain more market share, especially in room air conditioners (AC). Healthy festive demand and steady distribution reach, along with their product expansion plans could augur well for the company.
Voltas is telling analysts that it may hike AC prices by 3-4% to cover rising input costs

Brokerages remain cautious

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This optimism reflects in the company’s share price as well, which has rallied over 49% since the beginning of the second quarter. However, despite management’s positive outlook, brokerages remain wary about its near-term growth.

Voltas is telling analysts that it may hike AC prices by 3-4% to cover rising input costs

The IIFL report highlighted that its “medium-term outlook is impacted by the subdued awards pipeline, even as Voltas remains cautious about booking new orders.”

BrokerageRecommendationTarget Price
EdelweissSell₹725
Geojit BNP ParibasHold₹848
Nirmal Bang InstitutionalAccumulate₹835
Motilal OswalNeutral₹775
ICICI DirectHold₹845
*source- Trendlyne
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