Tata Group stock to buy now for an upside potential of more than 40%; Do you own it?

Tata Group stock engaged in the business of air conditioning, refrigeration, electro – mechanical projects is experiencing a surge following Jefferies’ bullish target, predicting a 42 percent upside potential. The positive outlook has attracted investor attention, positioning the stock for strong growth ahead. Jefferies’ forecast highlights the strong fundamentals and growth prospects of Tata Group, driving confidence in its future performance.

Share Price Variation

During Wednesday’s trading session, the share price of Voltas Ltd reached an intra-day high of Rs.1,432.00 per share, rising 1.8 percent from its previous close of Rs.1,406.10 per share. However, the stock declined later to Rs.1,413.25 each. Over the past five years, the shares have delivered over 115 percent returns.

Target Recommendation 

Jefferies has initiated a buy recommendation on Voltas, setting a target price of Rs.1,990 per share, which suggests a potential upside of 42 percent. The firm anticipates that Voltas will recover and surpass a 20 percent market share, driven by strong demand and its competitive position in the industry. 

As the air conditioning sector braces for a significant 25-30 percent year-on-year increase in demand this summer, the industry is well-prepared with an ample supply of compressors. This preparedness, combined with Voltas’ strategic positioning, is expected to enable the company to capitalize on the growing demand, ensuring strong growth in the coming months.

Also read: 4 Fundamentally strong stocks with Beta less than 1 to add to your watchlist

Earnings Report

According to its recent financial updates, Voltas Ltd reported remarkable consolidated revenue of Rs.3,105 crores in Q3 FY25, marking a 18 percent increase from Rs.2,626 crores in Q3 FY24. In addition, the company saw an exceptional surge in net profit to Rs.131 crores, compared to net loss of Rs.28 crores in the same period last year.

Segmental Performance

Voltas’ Unitary Cooling Products (UCP) segment grew by 20 percent YoY in Q3 and 42 percent YoY for the nine months, with a 20.5 percent market share in room air conditioners. The strong demand for split and window ACs was offset by margin pressure from high commodity prices and USD-INR depreciation. Investments in advertising and financing schemes helped achieve Rs.7,155 crores in 9MFY25 revenue, up 38 percent YoY.

The Commercial Refrigeration segment saw moderate growth due to reduced customer capital expenditure, but Visi Coolers and glass top freezers drove sales. Margins were affected by inventory liquidation and slower production ramp-up, though fresh orders are expected to improve performance. The Commercial Air Conditioning segment remained steady, while Electro-Mechanical Projects saw a revenue increase to Rs.1,190 crores and a profit turnaround from Rs.120 crores loss to Rs.57 crores. 

Capex Plans 

The company has earmarked a total capex of Rs.400-450 crores for expanding compressor manufacturing and ramping up production at its Chennai factory. Of this, approximately Rs.250 crores will be allocated for compressor-related investments, pending finalization of technological partnerships.

Written by – Siddesh S Raskar

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