Copyright © HT Digital Streams Limited All rights reserved. Amid the weak operating environment, Voltas shares have surprisingly fallen 23% to ₹1,385 apiece so far this calendar year. (Reuters) Summary Voltas is managing high inventory and competitive pricing pressure as it tries to increase market share. Analysts stress the need for improved quarterly results to attract investors. Voltas Ltd’s FY26 is going to be an unforgettable one. Consolidated revenue is expected to decline for the year. For the half-year ended September (H1FY26), total operating income fell 16.6% to ₹6,286 crore, with the unit cooling products business contributing around 65%, down 24% from the same period of FY25. Blame the delayed onset of summer, an extended monsoon and GST-related demand lag for this performance. In an interaction with analysts recently, Voltas executives pointed out that while the demand scenario remains subdued, it is improving. “Management commentary indicated that while the industry may see a decline in Q3, the decline should be less than Q2 due to pre-purchasing at the channel due to the energy rating changes effective January 1,” JM Financial Institutional Securities’ Dec. 18 report said. The rating changes refer to the Bureau of Energy Efficiency’s stricter standards for various high-energy-consuming appliances. According to Voltas, channel inventory has fallen to around 45 days currently from 60 days around two months ago. However, this is still increased compared to 20-25 days last year, and therefore does not result in increased purchases from channel partners. In general, the focus is more on market share gains than margin. Voltas’ room air conditioner (RAC) market share increased sequentially to 18.5% in Q2 from 17.8% in Q1, and from 16% in Q4FY25. Still, the decline in revenue and higher operating costs led to a 380-basis-point Ebitda margin decline to 3.96% in H1FY26. Pricing strategy The margin is also affected by aggressive pricing strategies pursued by some competitors, which management believes are unsustainable. The company is deliberating on price actions in light of rising input costs led by inflationary trends and rupee depreciation (25-30% import of raw materials). Amid the weak operating environment, Voltas shares have surprisingly fallen 23% to ₹1,385 apiece so far this calendar year. Elara Securities (India) maintained its ‘accumulate’ rating on the stock, and maintained the target price at ₹1,400 based on 37 times September FY27 estimated price-to-earnings multiple, driven by lower penetration of RACs, anticipation of better summers and lower base which augurs well for FY27 and beyond. The main risks to Elara’s thesis are subdued sales in December and protracted winters impacting sales in the fourth quarter. Investors will wait to see evidence in terms of improving quarterly results before placing their bets. Demand recovery, inventory normalization and price increases are factors to watch out for. Get all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download the Mint News app to get daily market updates. more topics #Voltas #markets Read next story