Voltas shares in focus post weak Q2 numbers; analysts break down the numbers

The air-conditioning manufacturer and engineering services provider reported a 76.28% decline in consolidated net profit to ₹31.5 crore for the quarter under review, as a subdued summer season and GST-related demand deferment weighed on its cooling business.

It had posted a consolidated net profit of ₹132.83 crore in the July-September period a year ago, according to a regulatory filing from the Tata Group firm.

Voltas' revenue from operations declined 10.37% to ₹2,347.32 crore as compared to ₹2,619.11 crore seen in the corresponding period of the previous fiscal year.

In its earnings press release, Voltas said, "The period was marked by external challenges such as a lean summer and GST-related demand deferment, which impacted retail offtake and margins."

The company added, "Despite these short-term headwinds, Voltas retained its market leadership and continued to strengthen its strategic position through product innovation, manufacturing excellence, and channel expansion, while its diversified portfolio, including Electro-Mechanical Projects and Services and Engineering Products, acted as a stabiliser, reinforcing Voltas’ evolution into a comprehensive consumer durables and engineering solutions enterprise."

Voltas H1FY26 Earnings

For the six months ended September 30, 2025, Voltas reported a consolidated total income of ₹6,433 crore, down 16.7% compared to ₹7,726 crore logged in the same period last year. Profit before tax (PBT) dropped 60.8% to ₹257 crore as against ₹657 crore logged in the corresponding period last year. And a net profit for the period stood at ₹172 crore, down 63.2% compared to ₹468 crore logged last year.

What management said

Commenting on the performance, Mukundan Menon C P, Managing Director, Voltas Limited, said, “The second quarter of FY26 was marked by external challenges, but our fundamentals remain strong. The GST reduction and upcoming BEE efficiency transition will unlock pent-up consumer demand in upcoming quarters. Our integrated strategy and diversified portfolio, combining product innovation, manufacturing excellence, and channel revitalisation, positions us well for sustainable growth and value creation.”

Segment-wise Q2 Results

In the September quarter, Voltas' revenue from "unitary cooling products for comfort and commercial use", which has room AC business, was down 23.2% to ₹1,215.13 crore. It was at ₹1,582.19 crore in the corresponding period of the previous fiscal.

"The segment faced muted retail offtake due to the lag effect of the early monsoon and GST rate reduction (from 28% to 18%), which led to deferred purchases and higher channel inventory," said Voltas.

Moreover, margins were temporarily impacted by higher marketing support and under-absorption at new facilities in Chennai and Waghodia.

However, its revenue from "electro-mechanical projects and services", which comprises domestic and international project businesses, was also up 9.8% in the September quarter to Rs 966.17 crore.

The growth "supported the diversified portfolio that Voltas manages, mitigating seasonality in the cooling business. The domestic projects business advanced execution across MEP, water, electrical, and solar projects, while international operations maintained disciplined project management and high-quality delivery," it said.

Its revenue from engineering products and services was down 5.22% to ₹139.05 crore.

"The segment maintained operational resilience, with mining and construction equipment showing stable performance and textile machinery meeting revenue and collection targets. Aftersales service continues to be a strong contributor to profitability," it said.

Voltas Q2: What analysts say

Both Jefferies and CLSA said that the Q2 numbers were below their estimates. Jefferies said that poor operating leverage, higher marketing costs, and under-absorption at new facilities impacted margins.

CLSA noted that Q2 numbers were sharply below estimates on a higher-than-expected decline in cooling products (UCP) and a negative margin in that segment.

UCP reported a revenue decline of 23% YoY (worse than peers) and a contribution loss of 3.8%, the segment’s first loss in more than a decade.

CLSA said market participants should watch for any signs of an uptick in demand after the festive season and commentary on channel inventory.