Voltas Limited (NSE: VOLTAS) Q1 2026 Earnings Call dated Aug. 08, 2025
Corporate Participants:
Unidentified Speaker
Pradeep Bakshi — Managing Director & Chief Executive Officer
K.V. Sridhar — Chief Financial Officer
Analysts:
Unidentified Participant
Bhoomika Nair — Analyst
Natasha Jain — Analyst
Siddhartha Bera — Analyst
Naushad Chaudhary — Analyst
Umang Mehta — Analyst
Aditya Bhartia — Analyst
Sucrit Patil — Analyst
Achalkumar Lohade — Analyst
Harshita Surana — Analyst
Nirransh Jain — Analyst
Presentation:
operator
Ladies and gentlemen. Ladies and gentlemen, Good day and welcome to Voltage Limited Q1FY26 earnings conference call hosted by DAM Capital Advisors. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero or a Touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Bhumika Nair from Dam Capital. Thank you. And over to you ma’. Am.
Bhoomika Nair — Analyst
Thanks. Good evening everyone and a warm welcome to the Q1FY26 earnings call of Voltas Limited. We have the management today being represented by Mr. Pradeep Bakshi, Managing Director and CEO Mr. Mukundan Menon, Managing Director designate Mr. K.V. sridhar, Chief Financial Officer Nikhil R. Chandrana, Head Corporate Finance and Webhavora Head, Treasury. At this point I’ll hand over the floor to Mr. Bakshi for his initial remarks post which we’ll open up the floor for Q and A. Thank you. And over to you sir.
Pradeep Bakshi — Managing Director & Chief Executive Officer
Good evening everybody. As Bhumika has explained with me, I have got in the room Mr. Mugundhan Menon, K.V. shedar. Vaibhav. Nikhil. Yeah. These are the colleagues available in the room. And I would now request my colleague Mr. K.V. shedar who is the CFO. He will give you the brief synopsis of the results for the quarter 126 over to KVSH.
K.V. Sridhar — Chief Financial Officer
Thank you sir. Hope I am audible. Can someone please confirm?
operator
Yes sir, you are audible. Please go ahead.
K.V. Sridhar — Chief Financial Officer
Okay, so. Good evening all. Glad to connect with you all. For the first quarter results for Voltas, I’ll just start with the global performance a bit category performance and then go into the details of the specifics of the Voltas category performance. The IMF now expects global growth to reach 3% in 2025 driven by early spending ahead of expected tariff changes, lower overall tariff rates and government spending in some regions. However, persistent trade policy uncertainty, escalating geopolitical tensions and uneven inflation patterns, especially in US continue to weigh in on investor confidence. The consumer durable sector is experiencing headwinds after peaking in late 2024.
Growth has turned negative in May 2025. Credit flow to the segment has tightened and a decline in electricity consumption points to a subdued demand for cooling products such as air conditioners. While the RBI’s recent rate cut indicates a pro growth policy stance, discretionary consumption remains fragile during the quarter. Weather related volatility had a significant bearing on temperature sensitive categories, most notably air conditioning category. The summer of 2025 arrived late, stayed mild and ended abruptly curtailing peak demands for air conditioners. These factors, coupled with a record base in the prior year, explained the short term pressure on Volta’s top line and margins.
Despite these temporary challenges, Volta demonstrated resilience by retaining its market leadership in room air conditioners and maintaining stable performance across its core business segments. Volta’s Beko continued its aggressive growth trajectory, achieving year on year growth of 33% along with market share gains. For the quarter ending June 2025, the company reported a consolidated income of 4,020.65 crores against 5,001 crores in the same period last year Create your own website by saying this is what I want? With wix, you can first up, let’s talk about AI color themes. You can get any combos you want, bold and bright, minimalist and sleek, or something you didn’t even think of. Just describe the vibe you want or even use the colors of your logo and let AI do its thing. Beautiful. Next up is the AI section created. This is great for those website essentials like a contact section or a place to subscribe. Now I’m running a sale so I punch in some details and just like that I have a promo section.
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Once you have your first version, you just keep going. I add dark mode, polish the transitions and make sure it works smoothly across the across devices. The best part I can just stay in flow. No blockers, no switching tools, just building. So start with your idea base 44 does the rest. Profit before tax stood at 202.72 crores compared to 451.52 in the previous quarter. Same time net profit was at 140.61 compared to 335 in the previous corresponding period. Previous period Last year EPS for the quarter ended 30 June 25 was 4.25 compared to 10.10 in the same period for the previous for the same period in the previous year. A snapshot of the results I think has already been shared, so I don’t want to elaborate on that. I think it’s already been shared earlier now if you go to the specific Performance Segment Wise for Unitary Cooling Segment the unitary cooling products segment experienced one of the most abrupt seasonal reversals in recent years.
Q1 2025 had delivered an exceptional summer with soaring temperatures and heat waves driving air conditioner sales to record highs. Voltas had then registered 65% growth in AC volumes, gaining further market leadership. This strong base created a high reference point entering into FY26 during Q1 FY26 it represented opposite scenario. Summer arrived late, was marked cooler across large parts of the country and gave way early to monsoon conditions. As a result, peak air conditioner, commercial refrigerator and air cooler selling season was shortened by several weeks leading to substantial drop in primary offtake. Voltas in preparation had entered the season with robust channel stocking, anticipating a continuation of demand trends from the prior year.
However, as temperatures remained subdued, consumer footfalls in stores declined noticeably. Retail sales in key metros and tier 2 tier 3 cities fell below expectations and inventory across trade channels remained elevated. Voltage undertook tactical interventions to support secondary offtake. Consequently, factory operations had to be scaled back mid season to avoid overproduction. This under absorption of fixed costs combined with higher warehousing and holding expenses put short term pressure on profitability. Despite these challenges, Voltas maintained its number one year to date, June 2025 market position in room air conditioners at 17.8%, reflecting enduring brand trust and strong channel relationships.
It is important to reiterate that the fundamentals of the room AC business remain intact. From FY 2022 to FY2026, the segment has maintained a robust volume cagr of over 20% for Q1, the company has initiated realignment of inventory and production to reflect actual demand conditions. The festival season and possibility of a second summer in certain regions may further aid recovery. The company has started preparations for upcoming revision to the Energy Star labeling regime later this year. While recovery for the segment may take a few quarters, the company remains cautiously optimistic that its strategic investments and ongoing initiatives will support long term growth and reinforce its leadership in the cooling product segment.
This commercial air conditioning segment also remains steady with continued demand for BRF systems, cassette ACs and ducted products. While retrofit and customer care margins were softer, they are expected to normalize as execution stabilizes in the later half of the year. To summarize, for the quarter ended June 26, the UCP segment registered revenue of 2,867 crores as compared to a significant higher performance of 3,800 last year. For the same period, the segment EBIT was at 104 crore in FY26 as compared to 327 in the previous year. Segment B Electromechanical Projects Projects under the EMPS segment was largely stable during the quarter.
Voltas continued to deliver steady performance across geographies supported by strong internal controls, timely certifications and prudent receivables. Management. International projects in UAE and Saudi Arabia remain a key part of the portfolio and contributed to both revenue and margin. For the quarter ending June 25, segment revenue was 921 crores compared to 949 crores India in the same period last year. In terms of profit it was 49 crores as compared to 67 crores in the last year. The total carry forward order book as on 30 June stood at 6200 crores, ensuring visibility for future four quarters. Cost discipline, project governance and on ground execution efficiency remain core to the company’s strategy in this segment.
Segment C Engineering Products and Services the segment faced some challenges during the quarter influenced by broader macroeconomic trends and industry wide pressures. For the quarter, their Segment revenue was 135 crores compared to 160 in the previous. Whe Quarter Same period the segment result for the quarter was 40 crores as against 44 crores for the corresponding quarter last year. The engineering, products and services segment saw softer performance driven primarily by external pressures. The mining and construction equipment vertical was affected by lower sales of power screen machines, although this led to an improved margin profile due to favorable product mix. Operations and maintenance contracts remain stable and provide baseline support to revenues in the textile machinery division. Capex sentiment remained subdued among customers, especially in international markets. Demand in agency business remained limited and spending caution impacted both revenue and margins.
Voltas is focused on consolidating its presence in spinning and post spinning segments while improving service capabilities to position for the next up cycle. With regard to Goldtech, Boldbeck continued its robust growth trajectory in Q1 FY26, selling close to 1 million units and achieving 33% year on year volume growth. The washing machine category drove the expansion supported by refreshed product lineup and enhanced retail presence. Market share gains were recorded in both semi automatic and overall washing machine segments, while refrigerator category also improved its standing, particularly in the direct cooling segment models. Boldbeck’s growth was backed by agile manufacturing, timely availability of fast moving products and a steady pipeline of product innovation and new launches tailored to evolving consumer needs.
Improved traction across general trade, modern trade and e commerce channels was complemented by an enhanced retail visibility, focused marketing campaigns and operational efficiency driving both volume expansion and margin improvement. Boldbeck’s growing scale, expanding product portfolio and increasing consumer acceptance continue to strengthen Voltas overall appliance business while reducing its reliance on seasonal product categories. Volkswagen trajectory strengthens Voltage’s overall consumer appliance portfolio while also diversifying seasonality risk inherent in the cooling products category. To summarize at an overall outlook, Voltage views the performance dip in Q1 FY26 as temporary inventory normalization, tactical cost control and a demand rebound during the upcoming festive period are expected to support sequential recovery.
The company retains its market leadership across key cooling categories and remains fundamentally strong. Further, Boldbeck continues to grow and market share gains remain encouraging. The projects business continues to progress steadily across all segments. Voltas is investing for the long term with sharp focus on innovation, execution, excellence and customer centricity. Thank you.
Questions and Answers:
operator
Sir. Should we begin the question and answer session? Thank you sir. Ladies and gentlemen, we will now begin the Question and answer session. Anyone who wishes to ask a question may press star and one on the Touchstone telephone. If you wish to withdraw yourself from the question queue, you may press star and two participants are requested to use handset while asking a question. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the question queue, please restrict your questions to two participants. If you have a follow up question, please rejoin the queue.
First question is from the line of Natasha Jain from Philip Capital. Please go ahead.
Natasha Jain
Thank you for the opportunity. So my first question is on the RFE side. Can you tell us how July month was for Voltas? What is the current inventory looking like for you at a brand level as well as the channel level and did you see any pricing pressure or are you continuing to see that? That’s my first question.
Pradeep Bakshi
So you know we have just concluded month of July and the numbers are getting consolidated so in fact it’s not a very good number. But right now since I do not have the clear picture I will not be able to comment on this. And since we are mainly talking about quarter one, I think better we stick to quarter one numbers at the moment because that’s in my know control and I can talk about that. Coming to your question on the inventory inventory in the trade you are talking about or inventory you are talking about the brand inventory.
Natasha Jain
So both at whole classes level and at the channel level,
Pradeep Bakshi
So we have, you know, you know having seen a wonderful 24, 25, we had planned for a big, you know, sales during this year as well. So entire Industry had planned a, you know, in a big way and we had augmented our, you know, capacities and therefore all of us are carrying inventory. So talking specifically about brand quotas, we are carrying an inventory of about three months or so, three to four months at best. And as far as state partners are concerned, they are getting inventory on an average about two months.
Natasha Jain
Are we continuing to give trade discounts or you know, indirect discounting like pre installation, does that still continue?
Pradeep Bakshi
So, you know, we have to remain competitive because you know that we don’t, we are a brand leader and we don’t want to lose out our market leadership and therefore to retain our leadership position, we are trying to remain competitive in whatever our offerings are so that we continue to garner market share. But we are not discounting per se. We are not discounting per se at the moment. We have not, you know, the sales are happening automatically and we are hopeful that, you know, as we enter into the festival season now, festivities have already begun, Onam has begun and after that, you know, Durga Puja, you know, Diwali, Navratra, Diwali, all this is going to continue.
And the second summers are also likely to come in. So hopefully since the season, summer season was milder, summers were milder. I am hoping that, you know, the festival season and the second summer should be looking up and we will be able to make up for these losses. So hopefully these inventories will get liquidated in automatic way rather than, you know, I’m not looking at discounting in a big way, be honest.
Natasha Jain
Got it, sir. And my second and last question is on the numbers itself. Now if I see south India was a worse of season than north India and Boltas is more indexed to North India. In fact, you are the leader in terms of north Indian markets where summer was still good until the first week of May. So relatively still the numbers have been worse off than our peers who were more indexed to the south part of India. And then even on the margin side, I mean now our capacity is at the same level versus everybody else’s.
So there also the decline has been sharper than what we probably expected. So could you tell us, is it just completely reverse leverage or there are any serious one offs that we may have accounted for in the UCP segment? That’s it. Thank you.
Pradeep Bakshi
Yeah. So you know, if you look at the summers never got set in into north India. Unfortunately, as you rightly said, our north India is our, you know, big state and the largest number comes in from there. Of course we are brand leaders across regions but in a bigger way. As you rightly said, in the northern region, yes, but unfortunately since the north India did not get to see summer this year, we have not been able to gain big weight. However, you see that our market leadership has remained intact. And if you look at if you have analyzed in case you were able to lay your hands onto the market share numbers in the entire quarter, you know right from April to May to June we have continued to increase our market share.
You know April our market share was 16.9%, you know, May our market share was 17.9% and now currently it is 19.3% market share as of June end. So you see that while we may not have been able to get full summer season, still we have continued our focus has remained on gaining the more extraction from the market. Whatever may be happening, even if the sales are low, we want to extract more and try retain our leadership position in that. And that’s what we have been doing.
Natasha Jain
Way. And for the U margin. Any one of.
operator
I’m sorry to interrupt. May I request you to please rejoin the queue as there are several participants waiting in the queue. Thank you. The next question is from the line of Siddhartha from Nomura. Please go ahead. Yeah, thanks for the opportunity.
Siddhartha Bera
Sir. Sir, first question is given this week, first quarter, would you have some guidance about the year? How much growth are you expecting given the outlook you have for the remaining months? And second is on the market share. If I look at last year we had above 19 market share and close to 19 and a half percent in the first quarter. So have market shares sort of slipped sometime in between and now we have. Gained it back and going ahead, do you think you will probably prioritize market. Share and try and gain more market share from where we are?
Pradeep Bakshi
So many questions have been embedded into your one question. So let me try answer. If I miss out then you’ll have to remind me. So firstly you are talking about the how the having seen the dip in the quarter one how am I looking at the balance of the year? Right? That’s one question. Question number one.
Let me answer on that. You know, yes, quarter one was significantly low and as I answered to the previous speaker as well, you know, the we are expecting the, you know, festival season onwards, right from October, November onwards and as we enter into the second summers and then finally we get into the, you know, next year summers, we are expecting, you know, these will look better because, you know, in the past, you know, years also several years, whenever we have analyzed, whenever summers were milder in the quarter one, the quarter three, four will make up for the loss of that.
I am expecting and hopeful that quarter three onwards, festival season onwards, we will again regain, you know, the sales and the business will be as usual and normal. So hopefully the year end should be somewhere either flattish or at best between 5 and 10% eGroup, sort of, you know, number I’m expecting for the industry. So this is the question one, then what is the other question? If you can Repeat, please.
Siddhartha Bera
Market share. 17.8 and we have gained now.
Pradeep Bakshi
Yeah, market share, yes, of course, I explained to the previous speaker again we have gained, you know, in April, May, June, 16.9 to 17.89 to 19.3. So we have of course, definitely we are. Our continuous endeavor has been to gain more share and to retain our leadership position. Whether the market share was at 17.8% or 19.3%, you will appreciate that we have retained our leadership position in the category and also other product categories. Also if you look at in each of the category, market shares are continuously been increasing across other appliances as well.
Siddhartha Bera
Yes sir. So coming to that in Worldbake.
operator
I’m sorry to interrupt. May I request you to please rejoin the queue as there are several participants waiting in the queue. Thank you. The next question is from the line of Naushat Chaudhary from Aditya Birla Mutual fund. Please go ahead.
Hi, two clarifications.
Naushad Chaudhary
Firstly on inventory, can you share the absolute number? Because three, four months making it average and thinking which month should I take becomes very difficult. So three, four months of the peak summer of the soft season, very difficult. To understand the actual number. So would be better if you can. Share the absolute number of inventory at world class level.
Pradeep Bakshi
I will actually, you know, I am not caring to be honest the full number because as you know the, as I said the July number, July numbers are still getting consolidated. So after those numbers are getting consolidated, after that only I’ll get to know the clear number. Probably you can, you know, come back to my team Baba and we will try to answer you later on on that.
Naushad Chaudhary
Should it be around 1 million if I.
Pradeep Bakshi
No, no, no, no, no way. One million, you know, so it’s a fairly big number. So I have already done more than one and a. Roughly around one and a half million. I’ve already done. So one million means it’s the entire year stock. It’s not that it’s much lesser than that. But let me get the exact numbers last. On the project business side.
Naushad Chaudhary
Last quarter we had indicated we are seeing some green shoot of recovery. But if I look at the order book it is consistently, you know, sliding. How should we look at and look. At this business and what should we. Expect from the project business going forward?
Pradeep Bakshi
We have got a reasonably good order book in our hands. Both, you know, international we’ve got around 1700 odd crores and in the domestic project business 3200 odd crores. Sorry, 6200 crores. So which is higher than the previous year? Previous year opening was around 5000 crores only for the domestic bidders and the international project was almost about the same number. So I don’t think. Yes, but of course we have been as I told you earlier also in the project business we are trading a bit carefully wherever meaningful projects are coming our way which are having assured margins and the funding is properly available there only we are participating.
So we don’t want to unnecessarily burn our fingers. As you know that in the past few years we had some nightmares in our international operations in the projects. So after that we have taken a cautious call that we will book orders wherever it is meaningful. But however, we’ve got reasonable good order book in hand and our team is continuously, you know, we’ve got lot of, you know, inquiries in hand. Our teams are, you know, filling up tenders and hopefully in quarter two, three, four, we’ll have more, you know, projects in hand and we’ll be able to share good news with you later on.
Naushad Chaudhary
With this size of order books, should. We expect any growth in the project business next year or should it be flat?
Pradeep Bakshi
Next year. You’re talking about 27, FY26. We are in 26. You’re saying next year. Which year you talking about? I mean full year.
Naushad Chaudhary
FY26. Should we expect growth in the project business?
Pradeep Bakshi
Yeah, definitely. Project business has been doing pretty well. Domestic projects especially even international also we are faring reasonably okay. So you will get to see better, you know, traction from both these, you know, project businesses.
Naushad Chaudhary
Okay, all the best.
Pradeep Bakshi
You know, unfortunately, while we have seen a bit of a dip in the, you know, product business, consumer durable business, only the AAC part. However, if you look at our project businesses results you have, you would have gone through. Project businesses have done much better. Even textile, machinery, mining and construction, all of them are on target and they’ve done better than the previous years here.
Naushad Chaudhary
Thank you.
operator
Thank you. The next question is from the line of Umang Mehta from Kodak securities. Please go ahead. Mr. Please go ahead.
Umang Mehta
Yeah. Thanks for the opportunity. Sorry sir. To get harp on the market share. But we look at June exit. You are still down 200 bits. Yoy. So any assessment You’ve done as to what could be the key reason behind it. Have you changed anything on pricing, channel margins or anything you can kind of share market share?
Pradeep Bakshi
I think, you know, I answered you on that. The reason for market share, market share year on year dip is actually, you know, market, you know there are so many players entering into the fray at the moment and if you look at more than 65 players are available and therefore to some extent it is likely to become a bit fragmented. It cannot continue to be 25, 26% market share anymore. However, our focus focus is to retain the leadership position as I’ve been, you know, continuously telling you and to. And if you look at our June 19, you know, June numbers, we are at 19.3% market share and we are keeping, you know, maintaining a, you know, fairly reasonably difference with the number two player.
Almost 400 basis points.
Umang Mehta
Okay sir, thank you sir. The second one was on UCP margin. Now your cost structure is fairly variable. You know, in other expenses, logistics, service. So this other expenses in standalone is up 35 crores. Yoy. You did allude to higher promotion possible. To quantify how much was the higher promotion which you gave this quarter. I mean three, three and a half. Percent margin was a bit of a surprise that the end of question.
Pradeep Bakshi
See actually of course the promotional expenses including advertising and also the sales costs we had to spend a bit higher since summers were lower and to retain our leadership position we wanted to keep the trade and the consumers intact with our brand and therefore we have spent. However, as I said is it will get made up in the subsequent quarters by, you know, you know, gaining more, you know, traction from the market. So yes, your point is valid. We have spent a little more but to, to retain our, you know, sustainable leadership position.
Umang Mehta
Sure sir. Thank you.
operator
All the best. Thank you. The next question is from the line of Aditya Bharati from Investec. Please go ahead. Hi, good evening. Sir, you mentioned that the margin hit.
Aditya Bhartia
That we saw was an account of under absorption of costs as well as. Some of the other expenses on marketing side that we discussed. Now given that there’s so much inventory in the channel and even companies are also carrying high inventory, it’s very likely. That factories will continue working at lower utilization level. And to that extent it seems that under absorption of cost will remain a. Trend in the next couple of quarters as well. Is my understanding correct?
Pradeep Bakshi
Yeah, your understanding is correct because you know the inventory is here so we have to be little prudent and the cost, you know, improvement while you know, the Factories cost will remain unabsorbed to the full extent. However, we are carrying out lot of cost improvement initiatives across our business verticals and looking at all our overhead line by line and seeing as to how can we improve on the cost and save when the business is not, you know, as good as what we would have expected. Therefore we want to save on the cost. So I think hopefully we will be able to make up through cost improvement projects and we’ll be able to share better news by quarter three.
Aditya Bhartia
Understood sir. And are you also fearing intense competition on the pricing side or on in terms of extending support to the channel or to customers given that there’s high. Inventory as well as as you pointed out, so many players in the market.
Pradeep Bakshi
See of course there is bit of a desperation in amongst, you know, certain brands they are trying to euro discount. However we have retained our position as of now and but since the sales is not as much it remains, you know, whatever terms are being made by them, they remain unaffected and we are not getting affected by those price drops by anybody as of now.
Aditya Bhartia
Perfect, perfect. And just one last bit on the project side. So you mentioned that the project business has been steady. When we look at margins, margins have been slightly on the kind of lower. Side versus what we have done in the past. So how should we think about the. Margins in this segment from a slightly longer term perspective? I know there are no losses and. We’Ve kind of turned around to that extent. But is 5% kind of an EBIT margin? Looks like a, like a sustainable number. Or can it be higher?
Pradeep Bakshi
So 5% is definitely sustainable, you know, percentage on the project side. If you look at our past year numbers also and we said we will guidance also when I’ve given you as always said the projects will hover around 5% or so all through. So 5% is definitely sustainable. There could be a small blip here and there because we had provided for one particular project in the international business and that has slightly derailed our project margin Otherwise overall in the domestic project business we reasonably done well and hopefully you know you will get to see this year with you know, more than 5% on the project side at least.
Aditya Bhartia
Perfect sir.
operator
Thank you so much. Thank you. The next question is from the line of Sukrut Patil from Eyesight Fin Trade Private Limited. Please go ahead. Thank you very much. My question is specifically to Mr. Bakshi.
Sucrit Patil
Are you there online sir? Me?
Pradeep Bakshi
I am only answering you sir. All along I’m on the line yes.
Sucrit Patil
Yes, good evening sir, this is Sukhrut Patil. I had a forward looking question. As Volta continues to lead in the room air conditioner and tries to expand expand its footprint in the commercial cooling and home appliances space, how are you thinking about integrating energy analytics, smart maintenance. Platforms or AI led demand forecasting into. Your product and service ecosystem in the next one to two years? And if you are planning to implement this, how do you think this will help voltage build a differentiated tech enabled mode in the climate solutions? Coming right. Thank you sir.
Pradeep Bakshi
Okay, so many questions again. So let me try answer. Firstly when you are saying are we the brand leader, are we getting the more market share? All this I have replied earlier also. Yes, we are the brand leader for more than a decade now, right from 1213 onwards we are retaining our sustaining our leadership position and continuously we are trying to extract more and more market share for this quarter also I’ve already shared how we have improved our market share on month, on month basis between April, May and June period. So that’s answer number one.
Secondly when you’re talking about the artificial intelligence and IoT enabled products and services. Yes we have already been, you know, we brought about, you know, products which are artificial intelligence, IoT enabled and they can work with Alexa and you know otherwise also the. If you got, if you want to operate your AC thousands of miles away through the Internet you can get connected with our ACs. We are, our team also is developing some new products which is at the moment it is at an agent stage and I don’t want to share in public. After a few months you’ll get to see our AI enabled series will be introduced in the market on the AC front coming back to service, I have shared earlier also all on the commercial air conditioners.
Our you know all our chillers are connects through Internet with our office, you know in the headquarter in my office where a team of engineers are continuously monitoring all the installations across the country and they have already been able to move from the predictive maintenance to preventive maintenance because they get to see as to how air condition, how sailors are behaving in a particular site and in case that needs any surveys it gives a warning to them and they are able to connect with the client and they are able to address that similar kind of thing.
We will try and implement in our other product categories also as we move ahead.
Sucrit Patil
Okay, thank you very much for your guidance.
operator
Thank you so much. The next question is from the line of Mr. Achal Lohade from NuVaMa Institutional equities please go ahead.
Achalkumar Lohade
Yeah. Good evening sir. Thank you for the opportunity. Sir, pardon me if I’m asking a repetitive question. If you could help us understand what is the industry decline for the quarter and for the first half as in. You said year to date market share. Does that mean Jan to June or it is April to June? Hello Sir, I can’t hear you.
Pradeep Bakshi
Yeah, so you know firstly let me answer you on your question how the market has degrown, how the industry has regrown in the quarter one so firstly I’m talking about fiscal year quarter only Whenever we are addressing, we try to address the fiscal year. So my question, my answer will be limited to the quarter one fiscal year which is April to June period. The industry on a primary sales basis would have regrown by about 35 to 40 odd percent approximately depending on brand to brand level basis. Yeah, so this is.
Achalkumar Lohade
Yeah and for us on a year. On year, if I look at the. Market share, what you’ve mentioned it, it. Was 21.2% in 1Q25 as in June 25 quarter. June 24 quarter. Do I have the number right?
Pradeep Bakshi
Yeah, that’s correct.
Achalkumar Lohade
And that has declined to 17.8%. Have I got that also right, sir.
Pradeep Bakshi
For the full quarter if you’re asking our market share, yes, is 17.8% but the June end number is 19.3%. That’s what I shared with you. And as compared to 21 point what last year number June number was saying as again said we are at 19.3% currently.
Achalkumar Lohade
Oh okay. So that 21.2 is basically I would request. No, I’m just clarifying, I’m just clarifying. Let me clarify that. So that 21.2% is basically 19 for. The quarter average, right?
Pradeep Bakshi
Yes, yes it is June in number sir. Quarter number is 17.8 as I told you and June and number is 19.3% right?
Achalkumar Lohade
No, against the 17.8 what was the. Average number for full quarter last quarter? One Q20.
Pradeep Bakshi
Last year it was 19.5% quarter number sir.
Achalkumar Lohade
19.5. Got it sir. And the second question I had just in terms of the margins what is the extent of reduction in the gross margins in the, in the UCP business? Is there any way to know that sir? Is there any fall in the gross, gross margins, you know, material margins.
Pradeep Bakshi
So I think we are, we are addressing the EBIT which we have shared with you in the balance sheet. Also you would have seen the margins have in this. Am I audible now?
Achalkumar Lohade
I can hear you sir.
Pradeep Bakshi
In between. I lost voice. I don’t know. So anyway, sorry about that glitch. So you know. Yes of course the, the EBIT level we have shrunk quite a bit and as you know the reason is roughly around 4 odd percent 400 basis point. We would have shrunk our profitability a bit at an EBIT level and the reasons I have shared with you, it is under absorption. You know. See firstly there was a major dip in the quarter volume numbers. So unless until you have got a basic math or scale the profitability doesn’t come that much.
So that is one piece. Secondly, having seen the last good year we had augmented and we have made a lot of investments and those capacities at Chennai plant especially has remained under absorbed. So probably because of under absorption the profits have shrunk in this quarter. However, as I told you as we are going forward we are making sudden corrections one, I have told you that you know, cost improvement projects are being carried out by each of the businesses to see as to where all we can save from. Secondly, as I told you the we are looking at festival season in quarter three, four as a big number coming up from there which should also these you know, points should make up for this loss which we have you know gained in the quarter one.
So hopefully by the year end we will be able to protect and will be slightly better than what we are today.
Achalkumar Lohade
Got it sir. Thank you and wish you all the best.
operator
Thank you so much. Thank you. The next question is from the line. Of Harshita Surana from ubs. Please go ahead.
Harshita Surana
Yeah. Am I audible?
operator
Yes, please go ahead.
Harshita Surana
Yeah, so thank you for the opportunity. So my question was given last year’s strong summer season, we now have several new brands entering the cooling products market and with this current year being relatively subdued and we think established players like holders could leverage the experience and navigate through it. But any color on how these new entrants are finding the current environment and any consolidation that you could see in the market happening currently.
Pradeep Bakshi
See all the new entrants are facing the headwinds at the moment. When the new players enter it becomes very difficult for them to compete with the established players and therefore . Boys Labor Day event is here and the tire deals are rolling in. Get free installation on any set of. Four Michelin tires or get a free. Fourth tire plus free installation on a set of four Cooper Adventurer all season tires. Shop online and make your appointment today. When I’m sourcing for my store, I’m creating a world. It’s really important that all the items really work well together. Reading where it’s coming from, who’s making it, the story behind it. I’m curating a space with deep intention. You know, they have to face the onslaught of the bigger players who can afford, you know, they come with the deeper pockets to sustain losses and therefore the newer players are not easy able to, you know, establish themselves so much. However, some of the old players, yes of course they are resorting to you know, the towns to gain, you know, more share in the pie.
But it is not a sustainable practice. It is a short term approach by these players.
Harshita Surana
Okay, got it. Thank you.
operator
Thank you. The next question is from the line of Niran Jain from BNP Pariba. Please go ahead.
Nirransh Jain
Yeah, hi. Thank you for the opportunity and. Just want to take firstly on the you mentioned that you you have already started preparations for the upcoming energy Star labeling. So if I’m not wrong, so the industry is expecting around 4 to 5% price hike on the input cost. So when you’re saying preparation so does. It mean that you’re looking at a. Cost engineering and would try to absorb. This kind of cost or are you. Looking for some kind of price hike? So just wanted some emphasis on what. Kind of preparations you you are wrestling to here.
Pradeep Bakshi
So you are not on, you know, see I all of us understand whenever the energy, you know, regime changes there is going to be a cost impact. However how much cost impact is going to come it is difficult to assess at the moment because as you rightly answered yourself only that you know we will try to navigate these changes through the value engineering also in our way. So probably we’ll see as to how much can we reduce on that impact by the next table coming up so that actually you know I’ll be able to answer to you in somewhere in November, December.
By then you know this value engineering project would get over and also we will be closer to the, you know, actual numbers coming up. So. But yes, surely and whatever little impact has to be passed on we will pass on also. And whatever through value engineering we can, you know, absorb. We will try and do that both ways it will go.
Nirransh Jain
Sure sir. And sir, secondly Wanted to check on voltage takeoff profitability. Any guidance there or any thoughts on how we are looking at achieving the profitability? Like both either at the path level right now.
Pradeep Bakshi
I thought you were going to compliment us on the what wonderful job Oldbeck team has done. We have been able to gain lot of market share. Last time when we had met and interacted, I told you that we are planning our first delivery is to take the market share to 10% and I’m delighted to share with you. In washing machine category we are 8.6% already and in refrigerators also we’ve reached to 7.2%. We have gained quite a bit during this quarter and last year. Also in last one year lot of work has been done in this direction and which has yielded good results.
So our first endeavor is to gain market share in this category. And once we’ve crossed 10% automatically you see that profitability also will come up with the higher numbers. So right now, yes, we are not profitable in this category and we are whatever we had budgeted, budgeted losses which is actually I don’t count it as loss. I count it as an investment into the brand. So that continues to happen there. Also we are carrying out cost, engineering cost, you know, value engineering projects in that also both with rather than, you know, I don’t believe that, you know, whatever we have to pass on to the consumer and increase the prices then what happens is you’re not able to gain market share and you are not able to extract more number.
I believe rather we should work on the value engineering projects and try to reduce cost so that we are able to offer better products and services to our consumers. That’s our endeavor.
Nirransh Jain
Are we seeing an increase in gross. Margins at Voltas Beko level?
Pradeep Bakshi
Yeah, slightly. They have improved over the last one year. If you look at, you know, 12 to 15, it has gone percentage gross margin had increased. Yeah, the gross margins have been increasing but they are not very significant which I can talk about with a, you know, pride some improvement happen for sure.
Nirransh Jain
Thank you so much and all the best. Thank you.
operator
Thank you. That was the last question for the day. I now turn the conference over to Mr. Bakshi for closing comments.
Pradeep Bakshi
So thank you very much listeners and the investors. So you know, I would like to share that having seen the performance of quarter one, Quarter one which was a sort of a temporary blip. Currently we are looking at technical cost controls it. We are also looking at as to how can we normalize our inventories by looking at prudently as to how much production is required which all models, whatever models are in shortages that only are being produced at the moment in the factories. And we are also expecting a demand rebound in the upcoming festival season and the second summers in west and South India. Hopefully with all this setting up we will get to see, you know our quarter three, quarter four. By quarter three and quarter four we have substantially improved on what we have.
The company’s focus is to retain its market leadership position across categories. May it be cooling products or washing products, all these products. We want to remain fundamentally strong and retain and sustain our leadership position. World Bank I have already cited you that we continue to grow and continue to garner better market share in the category which is very encouraging for us. And we want to replicate similar kind of thing across our product categories. The project businesses, we are continuously being prudent and trying to progress steadily in them. We are not showing any anxiety of picking up projects which are not meaningful and not profitable.
And across all segments, Votas is investing. We are investing for the long term gain looking at keeping sharp focus on innovation, execution, excellence and customer centricity. That is the focus. And with that approach we want to return to your shareholders on their investments. That’s what we look forward to.
operator
Thank you on behalf of DAM Capital Advisors. That concludes this conference. Thank you for joining us. And you may now disconnect your lines