Voltas shares fell 2.5 percent on Monday, August 17, after its fiscal first quarter earnings, as brokerages remained divided on the stock outlook despite strong growth in the room air conditioner (RAC) business. While UBS and Citi retained bullish calls, Nomura remained neutral and CLSA flagged downside risks as weak margins continued to temper the benefits of robust volume growth.

The Voltas stock was trading at Rs 1,287.5 at around 10 am, making it one of the top midcap losers for the day. The stock is down about 7 percent so far in 2026, broadly in line with the Nifty 50's decline over the same period. The Tata Group company has a market capitalisation of around Rs 42,600 crore.

UBS maintained a 'buy' rating on Voltas with a target price of Rs 1,560, implying about 18 percent upside from Friday's close. The brokerage said revenue and EBITDA missed estimates in the first quarter, although profit after tax beat Street expectations on higher other income.

UBS highlighted 15 percent year-on-year growth in RAC (room air conditioners) secondary sales and said Voltas is targeting a gradual recovery in margins at its cooling-products business to more than 7 percent. However, commodity inflation remains a near-term headwind. The brokerage also said domestic MEP (mechanical, electrical and plumbing) ordering remained healthy, while the EBITDA breakeven at Voltas Beko could be delayed by a few quarters.

Citi also retained its 'buy' call with a target price of Rs 1,550. It said RAC volumes grew 45 percent year-on-year, around twice the industry's growth, while Voltas' secondary market share stood at 17.3 percent in the year to June, giving it a four-percentage-point lead over its nearest competitor. However, Citi noted that margins remained subdued at 5.3 percent. It said most cost increases had been passed through and lower channel schemes could provide some support to margins.

Nomura maintained a 'neutral' rating and a target price of Rs 1,357, saying first-quarter EBITDA was broadly in line with consensus estimates. The brokerage expects high competition and the company's focus on market share to keep margin recovery gradual. It maintained its AC industry growth forecasts of 25 percent for FY27 and 15 percent for FY28.

CLSA was the most cautious among the four brokerages, retaining an 'underperform' rating with a target price of Rs 1,160, implying about 12 percent downside from Friday's close. While RAC growth remained strong and industry-leading, the brokerage said margins continued to be weak despite volume growth and price increases. Weak project growth and margin concerns remain key overhangs, it added.

The brokerages also focused on Voltas' newly announced joint venture with Atomberg to manufacture RAC compressors and related components in India. The venture is targeting annual capacity of 28 lakh units, with Citi expecting commercial production to begin in about 18 months. Nomura said execution of the compressor joint venture would be a key monitorable.

Earlier, last week, Voltas reported a 53 percent year-on-year increase in consolidated net profit to Rs 214 crore for the June quarter. Revenue from operations rose 19 percent to Rs 4,673.5 crore, while EBITDA increased 48.7 percent to Rs 265.5 crore. EBITDA margin expanded to 5.7 percent from 4.5 percent a year earlier.