Voltas shares tank 5% after weak Q3 results. Should you buy, sell or hold?

Shares of leading air-conditioner manufacturer and technical services provider Voltas Ltd fell 5% to a low of Rs 1,280 on the BSE on Friday after it reported a 35.4% year-on-year decline in consolidated net profit for the December quarter of FY26 at Rs 84.46 crore, compared to Rs 130.76 crore in the same period last year, according to a regulatory filing by the Tata Group company.Revenue from operations declined 1.1% year-on-year to Rs 3,070.77 crore in Q3FY26, compared to Rs 3,105.11 crore in the corresponding quarter of the previous fiscal. Meanwhile, total expenses during the quarter remained largely unchanged at Rs 2,945.19 crore.

Commenting on the performance, Managing Director Mukundan Menon CP said the Room Air Conditioner business continued to anchor overall performance in the third quarter despite seasonal challenges and the impact of a shorter second summer. He added that stronger channel momentum, improved product mix and benefit from GST rate reduction supported growth.

During the quarter, revenue from the unitary cooling products segment for comfort and commercial use, which also includes the room AC business, rose 8.64% to Rs 1,215.13 crore. The company said performance was driven by improved channel momentum following the GST rate cut and proactive purchasing ahead of the transition to the BEE star label, as customers prepared for revised pricing structures.

Brokers on Voltas shares

Goldman Sachs reiterated its sell rating on Voltas with an unchanged target price of Rs 1,210. That’s a 10% downside from the last closing price of Rs 1,350 per share. The broker noted that third-quarter margins came in better than expected, supported by better execution in the Unitary Cooling Products segment. However, it warned that while AC demand remains strong, margin recovery could be at risk due to input cost inflation, which could put pressure on margins in FY27. Goldman Sachs also flagged improved execution in the EMP segment, but pointed to continued losses in the Beko joint venture as an overhang. The company believes there is little upside potential from current margins and expects the stock to underperform.

Morgan Stanley maintains Equal Weight rating on the stock with a target price of Rs 1,409. The brokerage highlighted that UCP margins were weaker than expected and revenues were slightly lower than expected, meaning EBITDA and PAT fell short of expectations. Margin pressure was attributed to higher channel support and increased competition. However, Morgan Stanley noted that operational readiness for the coming season is improving, with margin recovery remaining a key factor to watch. (Disclaimer: Recommendations, suggestions, views and opinions expressed by the experts are their own. These do not represent the views of The Economic Times)