Voltas Shares Crash 9% After 58% Drop in Q1 FY26 Profit; Analysts Cut Estimates; BUY/SELL/HOLD?

Voltas shares fell sharply on Monday, tumbling nearly 9% to an intraday low of Rs. 1,192 after the Tata Group company reported a steep 58% year-on-year (YoY) drop in net profit for the first quarter of FY26. The disappointing results, announced on August 8, triggered heavy selling in the stock, which has now declined over 32% year-to-date.

Voltas Share Price Performance

As of the latest trade, Voltas shares were down 5.73% at Rs. 1,230.10, extending their losses to 7.89% over the past five sessions. The stock has fallen 10.18% in the past month and is among the worst-performing Tata Group counters in 2025 so far.

Voltas Q1 FY26 Results

For the quarter ended June 30, 2025, Voltas posted a net profit of Rs. 140.6 crore, down from Rs. 334 crore in the same period last year. Revenue fell 20% to Rs. 3,938.6 crore, while EBITDA dropped by half to Rs. 178.6 crore. Operating margins shrank sharply to 4.5% from 8.6% a year earlier.

Voltas management said Q1 FY26 was particularly challenging, with growth momentum reversing in May 2025 due to mild temperatures and delayed summer onset. The company is implementing corrective measures such as cost-control initiatives, inventory realignment, and production adjustments.

The weak performance was due to unseasonal weather, muted summer demand, and the early arrival of monsoons, which shortened the peak selling season for air conditioners and other cooling products.

Despite the weak start, the company remains cautiously optimistic about demand recovery in the upcoming festive season and the possibility of a "second summer" in certain regions. Voltas expects the overall industry to close FY26 with flattish to moderate growth.

Voltas Share Price Target

In a post-results note, Motilal Oswal cut its FY26 and FY27 EPS estimates for Voltas.
"We cut our EPS estimates for FY26/FY27 by ~9%/5% to reflect the 1QFY26 underperformance and lower margins in the UCP segment. We reiterate our Neutral rating on the stock with a TP of INR1,350, based on 45x Jun'27E EPS for the UCP segment, 20x Jun'27E EPS for the PES and EMPS segments, and INR22/share for Voltas"

Centrum in its report said, "Factoring weak Q1, we cut FY26E/27E EPS by 17%/3% and rolled over valuation to Sep '27. We retain the ADD rating with a revised SOTP-based target price of Rs1,455 (Rs1,325 earlier) on H1FY28E EPS."

With cost pressures, seasonal challenges, and competitive intensity in the AC market, Voltas faces a tough road ahead in the near term. However, recovery hopes hinge on the festive demand boost and favourable weather conditions later in FY26.

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