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Thursday, May 8, 2008

gem worth investing - VOLTAS

VOLTAS

Voltas, the engineering and air-conditioning major, is expected to gain immensely from the rising capital expenditure across sectors like retail, IT and entertainment, and higher infrastructure spending in India and other emerging markets such as West Asia.

Being the second largest player in the Indian organised heating, ventilation, and air conditioning (HVAC) market after Blue Star, the company is expected to reap benefits of immense opportunities in the air conditioning market, especially the non-residential segment, which is expected to almost triple to Rs 37,600 crore (Rs 376 billion) in the next five years.

Apart from HVAC, Voltas will also gain from the growth in the construction activities, which in turn throw up opportunities in the fledgling MEP (mechanical, electrical and plumbing) industry.

The company has established itself in its MEP business, which is growing at 40 per cent year-on-year, which had an order book of Rs 3,500 crore (Rs 35 billion) (international orders worth Rs 2,700 crore (Rs 27 billion) and Rs 800 crore (Rs 8 billion) worth of domestic orders) as on December 2007.

To its credit, the company has executed orders at nine out of the ten domestic airports, and is currently working on the upcoming international airport at Hyderabad.

The total investment of Rs 40,800 crore (Rs 408 billion) planned towards airports over the next five years reflects a huge market and hence, growth potential for players including Voltas and Blue Star.

Also, Voltas, which commands a 17 per cent share in the air-conditioner market, should benefit from increased consumer spending. All this put together indicate strong growth prospects for Voltas.
In This GEM Series:
gem worth investing - VOLTAS
gem worth investing - TITAN INDUSTRIES
gem worth investing - RELIANCE PETROLEUM
gem worth investing - IDFC
gem worth investing - HDFC BANK
gem worth investing - ABB
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