Check Before You Invest : Voltas Ltd

Snapshot

Q.1 Which industry/sub-sector does Voltas Ltd belong to?

Voltas Ltd belongs to the Consumer Durables sector, operating specifically within the Air Conditioners segment.

Q.2 Is Voltas Ltd a good quality company?

Voltas Ltd is a good quality company, based on a consistently good 10-year financial track record.

Q.3 Is Voltas Ltd undervalued or overvalued?

Voltas Ltd appears Somewhat overvalued, as its key valuation ratios are above with their past averages.

Q.4 Is Voltas Ltd a good buy now?

Voltas Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Performance Analysis

Q.1 Revenue growth of Voltas Ltd?

Voltas Ltd revenue growth is 23.5% for FY-2025, which is above its 5-year CAGR of 15.01%, indicating faster growth.

Q.2 Return on capital employed (ROCE) of Voltas Ltd?

Voltas Ltd Return on capital employed is 18.01% for FY-2025, which is above its 5-year historical median of 13.01%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 11.25%, indicating value creation.

Q.3 Return on Asset of Voltas Ltd?

Voltas Ltd Return on Asset is 6.65%, which is above its 5-year historical median of 5.53%, indicating improved asset utilization efficiency.

Q.4 Return on Equity (ROE) of Voltas Ltd?

Voltas Ltd Return on equity is 13.53% for FY-2025, which is above its 5-year historical median of 9.64%, indicating the business is making better use of its shareholders capital.

Q.5 Cash conversion cycle of Voltas Ltd?

Voltas Ltd Cash conversion cycle is 14 days, in line with its 5-year historical median of 14 days, indicating stable working capital management. However, you need to compare this with its peers in the industry.

	Current Level	5-year Historic Median
Asset Turnover	1.23	0.95
ROE	13.53	9.64
ROCE	18.01	13.01
Cash Conversion Cycle	14 days	14 days

Q.6 Gross Profit margin of Voltas Ltd?

Voltas Ltd Gross profit margin which is the profit after deduction of direct costs, is 8.9% for FY-2025, which is in line with its 5-year median of 8.9%, indicating stable margins.

Q.7 Operating Profit Margin of Voltas Ltd?

Voltas Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 7.33% for FY-2025, which is in line with its 5-year median of 7.33% indicating stable margins.

Q.8 Net Profit Margin of Voltas Ltd?

Voltas Ltd Net Profit Margin is 5.41% for FY-2025, is in line with with its 5-year median of 5.41%, indicating stable margins.

	Current Level	5-year Historic Median
Gross Profit Margin	8.9	8.9
Operating Profit Margin	7.33	7.33
Net Profit Margin	5.41	5.41

Q.9 Debt to Equity ratio of Voltas Ltd?

Voltas Ltd Debt-to-Equity ratio is 0.13, which is lower with the industry average of 0.24, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Voltas Ltd?

Voltas Ltd Debt to cash flow from operations is -3.85, which is at a unhealthy level.

Ownership & governance

Q.1 Promoter shareholding and pledge status of Voltas Ltd?

Promoters hold 30.30% of the Voltas Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

Q.1 Revenue growth of Voltas Ltd vs industry peers?

Voltas Ltd revenue CAGR is 15.01%, compared to the industry median CAGR of 16.91%, indicating slower growth and losing its market share.

Profit Metrics

	Current Level	5-year Industry Median
Revenue Growth	23.5	16.9
Gross Profit Growth	105.2	16.4
Operating Profit Growth	135.9	18.7
Net Profit Growth	236.3	20.9

Operating Efficiency

	Current Level	5-year Industry Median
Asset Turnover	1.23	1.29
ROE	13.53	13.87
ROCE	18.01	18.34
Cash Conversion Cycle (days)	13.74	19

Valuation & price assessment

Q.1 Stock return of Voltas Ltd over the last decade?

Over the last 9 year(s), the stock has delivered a CAGR of 16.3% based on the current price.

Q.2 What return has the stock given over the last decade?

	9Y	5Y	3Y	1Y
Share Price CAGR	16.3%	7.3%	20%	10.9%

Q.3 Valuation ratios of Voltas Ltd vs historical?

The current P/E is higher that its historical median.

Q.4 How do the current valuation ratios compare with 5-year historical median and industry numbers?

Valuation Ratios	Current	5-year Historic Median	5-year Industry Median
Price to Earnings	91.19	79.36	77.87
Price to Book	7.04	6.81	7.21
Price to Sales	3.26	3.26	2.40
EV to EBITDA	45.34	41.66	37.23

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