This Tata Group stock is potential rerating candidate on probable market share gains

Shares of the Tata-Group consumer goods company Voltas rallied in Monday’s trade (April 22) by as much as 5 per cent to day’s high price of Rs 1365 per share on the BSE. The sharp price rise in the stock after global brokerage double upgraded the stock to ‘buy’ from the earlier ‘neutral’ call.

At around 9:41 am, shares of the stock traded higher by over 3 per cent or Rs 40.55 at Rs 1341 per share on the BSE.

UBS has raised the target price on the stock by a sharp margin from the earlier Rs 885 to currently at Rs 1800, signalling now over 38 per cent potential upside.

The brokerage maintains that the market share of the consumer durable firm is expected to rise further and it sees its market share to scale 23 per cent by FY26. And any likelihood of an increase in market share will boost the chances of the company’s re-rating.

In the room air conditioner segment, the company has improved its supply thereby cutting costs.  The brokerage expects the company's revenue stream to be at Rs 10,000 crore from the consumer electronics segment (60 per cent on FY27E revenue. Also, for FY24-26E, the brokerage has raised its EPS by 4-31 per cent, while its estimates for revenue and EBITDA CAGR are 20 per cent and 28 per cent, respectively.

Also, in the company's JV VoltBek, the company's market share has been constantly logging an increase. Further, it is expected that it will breakeven in FY26E. 

Shares of Voltas over the last one year have scaled 57 per cent, while its 3-year return is at 44 per cent.