For Q3FY09, Voltas saw a 30% y-o-y revenue growth, which was in line with our estimate.
Sales in the EPS segment declined 31% y-o-y, though the electro-mechanical projects and services (EMPS) segment saved the day with a 67% y-o-y jump. The order backlog in the EMPS segment stands at Rs53.34 billion.
The EBITDA margin contracted 274bps. All the segments were under pressure, led by the EPS segment seeing the maximum erosion of 790bps.
Earnings too dropped. Excluding extraordinary items, earnings growth was 11%, weighed down chiefly by lower margins.
We lower our FY09, FY10 and FY11 earnings estimates—by 10.3%, 20.2% and 18% respectively, on lower sales estimates and the squeeze on margins, especially in the
Our revised target price of Rs53 (from Rs66 earlier) is based on 8x FY10e EPS. We retain our HOLD rating on the stock.