VOLTAS

gain deeper insight into its growth roadmap/demand environment. KTAs: 1) The management indicated a ~20– 25% decline in RAC secondary sales across players in Apr-May ’25, with a similar impact expected on primary sales, till inventory levels normalize. 2) Channel inventory remains elevated at ~6–8 weeks, though demand has recently picked up in parts of the North. 3) Despite subdued demand, players have refrained from broad-based price cuts and are instead offering freebies (further actions will depend on the season’s progress). 4) UCP margins remain strained, though Voltas targets a high single-digit margin, contingent on the summer season stretching more than usual. We had already built in a weak industry outlook for FY26 (see our note: Untimely rain: Killjoy for AC demand, apt time to BUY AC stocks), and hence our estimates are largely unchanged. Outlook reiterate BUY on Voltas and our TP of Rs1,450, supported by valuation comfort (implied 1YF UCP P/S at ~3.4x vs 10Y average of 3.7x). We reaffirm our view that weather-led disruptions often create compelling entry points.