Voltas could see over 35% profit growth as AC demand stays strong, margins recover: Equirus | Latest News Updates

Voltas could see profitability growth of more than 35% in 2026-27 (FY27) as strong room air conditioner (AC) volumes combine with a gradual recovery in margins, according to Manoj Gori, Director–Equities at Equirus Securities. He expects the company’s unitary products margins to improve to around 5.8-6% this year, providing a further boost to earnings.

“From a fundamental point of view, Voltas has addressed issues on the MEP business,” Gori said, adding that the company has also made significant progress on market share and manufacturing capabilities.
MEP is mechanical, electrical, and plumbing

Voltas reported a 45% increase in room AC volumes in the April-June quarter of 2026 (Q1FY27), significantly ahead of peers. Gori said the strong volume growth is likely to continue, with industry feedback indicating that July and August have started on an encouraging note. A favourable base in the second half of August and September could further support demand.

The company is also moving from a trading-led business model towards greater manufacturing capabilities. Gori pointed to Voltas’ manufacturing facility in the south and its joint venture with Atomberg to manufacture compressors. Commercial operations from the joint venture (JV) over the next 12-18 months could help strengthen Voltas’ supply chain and support margins over time.

Compared with Voltas, Blue Star had a weaker Q1, particularly on the margin front. However, Gori believes the weakness is temporary and expects Blue Star’s margins to improve towards 6.5% in FY27. With volume growth remaining healthy, both companies could see better earnings over the next few quarters.

“Many negatives are priced in, and volume growth trajectory continues to remain positive,” Gori said.

Gori is also positive on LG Electronics India, which delivered strong quarterly numbers and remains confident of achieving the upper end of its mid-teens revenue growth guidance and low double-digit earnings before interest, taxes, depreciation and amortisation (EBITDA) margins for the full year.

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He believes LG could deliver more than 15% growth this year. If margins recover towards 2024-25 (FY25) levels, the company could see significant earnings upgrades. Greater in-house compressor manufacturing, export opportunities and continued demand in India could provide additional support.

“if they are able to deliver to FY25 levels, we can see a significant upside from the current levels as well,” Gori said.