The Hindu Business Line : Voltas gains on good growth prospects

In today's trading, the stock price of Voltas gained 8.66 per cent at Rs 156.80 on BSE with volume of 2.61 lakh shares and on NSE it closed at Rs 155.85, up 7.97 per cent with volume of 4.20 lakh shares.

Brokers said Voltas portfolio of business is well diversified in terms of types of projects, geographical markets catered, products and services. In addition, the diversification has effected de-risking of the earning potential.

Voltas is a market leader in heating ventilation air conditioning and refrigeration (HVAC&R), well established mechanical, electrical, plumbing (MEP) contractor in West East Asia and has high margin trading business.

According to stock broking firm Refco Sify, Voltas is exposed to IT/BPO, malls & multiplexes, water treatment utilities, textile manufacturers and other manufacturing units. "Considering the buoyancy in the business defined under user industries, a healthy topline is expected," it said.

On the various businesses of Voltas, Refco Sify said the company is now well established in West East Asia as MEP contractors.

The oil boom is set to trigger an investment boom in the region. In addition, the Rs 400-crore water treatment project in Singapore proves Voltas capabilities in water treatment plants, it said.

Voltas is also the sole distributors of LMW spinning machines. It also distributed weaving and knitting machines of leading global manufacturers in India.

"With textiles set to see major capacity addition in the near future, Voltas is all set to gain from this high margin trading business which has profit before interest and taxes margins of 34 per cent in 2003-04," the broking firm said.

Analysts feel that the company's HVAC&R dominates the western and southern markets where the growth drivers such as IT/BPO firms, multiplexes and malls are coming up rapidly. Even in the room AC market, it holds a market share of around 11 per cent.