The India Meteorological Department has given a heat wave alert for Mumbai and Delhi.
The IMF had earlier indicated that heat conditions in the March to May period are likely to be normal or below normal. This has changed however with financial capital Mumbai recording 8 degrees higher temperature than the normal run-rate.
The country’s capital Delhi has recorded a season-high temperature of 34 degrees.
“40% of Voltas’ sales is from north (India) versus Blue Star which will help drive Voltas’ sales,” said Jefferies.
Meanwhile, the brokerage has cut earnings per share estimates for these two companies for FY22 and FY23 period by 7-8% to factor in the Russia-Ukraine conflict driven spike in commodity prices.
Jefferies said that with the prediction of heatwaves and the hybrid work model of work from home during some days of the week continuing at companies, summer season sales should be good.
The brokerage said it is positive on Voltas and Blue Star given the structural growth story in the air conditioner industry led by low penetration and recovery in the industrials segment.
Jefferies has a buy rating on Voltas with a target price of ₹1,450. On Blue Star, Jefferies has a buy rating with a target price of ₹1,275.
Shares of Voltas ended up 1.91% at ₹1,295.25 while those of Blue Star ended down 0.11% at ₹980.05.
Tata group company Voltas had reported a 24.93% decline in consolidated net profit for the December quarter at ₹96.56 crore.
Net profit of Blue Star rose 29.43% to ₹47.5 crore in the quarter ended December.
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