Engineering and construction major Voltas posted disappointing earnings for the second quarter. Its second quarter consolidated net profit slipped 54% year-on-year to lower-than-expected Rs 42 crore due to a sharp drop in earnings in its unitary cooling products and electro-mechanical projects and services segments.
The Tata group company’s net sales in July-September were up just 4% from a year ago at Rs 1,102 crore.
Analysts on average had expected Voltas’ second quarter net profit at Rs 63 crore on revenue of Rs 1,138 crore, according to a CNBC-TV18 poll.
Voltas said the performance at its electro-mechanical projects and services division was impacted by a couple of projects in Qatar, where there have been substantial cost overruns. Its unitary cooling products segment was also impacted by a mild summer, which hurt air-conditioner sales, coupled with the overall economic slowdown, inflation and high interest rates.
Voltas’ revenue from unitary cooling products fell 27% year-on-year to Rs 219.93 crore in the second quarter. The segment earnings dropped sharply to Rs 5.03 crore from Rs 24.4 crore in the year ago quarter.
Revenue at its electromechanical projects and services division rose near 9% to Rs 696.41 crore during the quarter. However, earnings tumbled 93% to Rs 4.5 crore. The segment order book stood at Rs 4,461 crore as of September 30.
Revenue at Voltas’ engineering products and services segment were down 5% year-on-year to Rs 120.2 crore, while earnings slipped 33% to Rs 17.8 crore in July-September. Voltas said the segment results were not comparable due to transfer of its materials handling business to SM Materials Handling Solutions, a joint venture with Linde Material Handling Asia Pacific.
Voltas shares ended down over 5% at Rs 102.20 on NSE on Wednesday. The stock has plunged 44% so far this fiscal.
Source: www.moneycontrol.com
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Gaurav Agarwal
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DENIP Consultants Pvt Ltd
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