Nomura Financial Advisory and Securities has downgraded Voltas to 'Reduce' with target price of Rs 265 as against current market price (CMP) of Rs 329 in its report.

Commenting on the company, Nomura said that, "Voltas consistently surprised us positively on better room AC (unitary cooling products-UCP) performance in FY15 as a result of its market share gain as well as significant operating margin improvement. Gains in the UCP segment made up for Voltas’ underperformance in the electro-mechanical projects (EMP) segment."

Commenting on the investment rationale, it said, ''The recent industry growth guidance cut by Blue Star (one of Voltas' key competitors) from 15% to 10% y-y further reinforces our dealer checks for slowing room AC sales this summer. We cut our FY16-17F earnings 12-16% to factor in weaker growth in room AC sales as well as further delays in the EMP segment's recovery. VOLT has outperformed the market significantly over the past two months and is up ~30% during the period; with potentially weaker results going forward, we downgrade the stock to Reduce from Buy previously. We recommend investors switch to Havells India (HAVL IN, Buy).''

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