Voltas

Voltas reported a Q4 FY26 consolidated total income of INR 4,930 crores, a modest increase from INR 4,847 crores in the prior year. However, profitability saw a significant decline, with Q4 PBT at INR 181 crores (down 47.23% YoY) and Net Profit at INR 113 crores (down 52.03% YoY). For the full fiscal year FY26, consolidated total income was INR 14,483 crores (down 7.97% from FY25), with PBT at INR 557 crores (down 53.23%) and Net Profit at INR 377 crores (down 54.79%). These declines were primarily attributed to margin pressures from commodity inflation and currency depreciation.

The UCP segment, driven by the RAC business, continued to maintain market leadership. FY26 marked a significant transformation with a comprehensive refresh of the RAC portfolio, focusing on feature-led, energy-efficient, and intelligent cooling technologies. New products with AI features like adaptive cooling and geofencing were launched. Despite these efforts, Unitary Product margins for FY26 were compressed to 3.2%, a substantial drop from 8.4% in FY25, mainly due to commodity inflation and currency volatility. Management expects a gradual improvement in margins, focusing on the quantum of gross margin.

The EMP segment demonstrated resilience and stable execution, contributing to Voltas' diversified portfolio. As of March 31, 2026, the total carry forward order book for Segment B stood at a healthy INR 6,200 crores. This includes INR 4,500 crores from domestic projects and INR 1,700 crores from international projects, providing strong revenue visibility. Management confirmed that no clients, either domestic or international, invoked force majeure^🌐, and margins in this segment are protected by price variation clauses in contracts.

Segment C, comprising the Mining & Construction Equipment and Textile Machinery Divisions, delivered steady top-line growth during the year. The Mining & Construction Equipment division benefited from sustained demand for crushing and screening machinery and infrastructure development. The Textile Machinery division showed resilience despite a challenging environment, focusing on customer retention and after-sales service. Both divisions continued to strengthen their aftermarket and service annuity businesses.

Voltas faced significant margin pressures in Q4 FY26 due to commodity inflation and currency depreciation, which were partially offset by comprehensive cost reduction and value engineering programs. The company has been actively working on cost reduction for the past 9 months, with some benefits starting to materialize. Management indicated that price increases, including a blended 6-7% for new models (5% for 3-star, 10% for 5-star) plus an additional 2-3% for copper, have been implemented and further increases are being monitored based on market stability.

The company observed positive traction in April and May 2026, driven by a serious heatwave across many parts of India. The reduction in GST from 28% to 18% on ACs cushioned the impact of price increases. Channel inventory for RAC has significantly dropped to less than 45 days, indicating robust secondary sales. Management projects the Room AC industry to grow by 15-20%, Commercial Refrigeration by upwards of 10%, and Commercial AC by 12-15% going forward^⏳, with Voltas aiming to leverage its strong brand and distribution.

Voltas has been accelerating investments in manufacturing capabilities and localization. The Chennai factory's capacity has been increased from 1 million to 1.5 million units during FY26, currently delivering approximately 1.2 lakh units per month. The company plans a small capex to further expand this capacity to 2 million units, with the next major investment expected in 1-2 years. Localization efforts at the Sanand facility are also being deepened across key product categories to enhance cost competitiveness and supply chain resilience.