KJMC has recommended `Accumulate` on Voltas with a price target of Rs 352 as against the market price (CMP) of Rs 213 in its report dated July 30, 2010.

The broking house gave the following rationale:

In the domestic markets order book remains very healthy with improvement in the execution cycle. Although the execution cycle is still in the initial stage of recovery, it is expected to speed up in the H2FY11.

Voltas is enhancing the component of its MEP and Water Management businesses while its foray into industrial MEP works has also been gathering strength.

Healthy order book and securing some good large order during Q1FY11 in the International markets indicates the company`s capabilities and efficiency in execution of very complex & challenging projects.

Also the improving pipeline of orders gives us confidence about strong revenue visibility in future.
At the current market price (CMP) of Rs 213 the stock is trading at 18.0x and 16.9x its FY11E and FY12E earnings of Rs 11.8 & 12.6 respectively.

In view of the recent appreciation in the stock price we downgrade our recommendation to `accumulate` and upgrade the target price to Rs 252 which is 20x its FY12E earnings of Rs 12.6. The target price offers a potential return of 18% on the CMP of Rs 208.

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