Voltas, a prominent entity under the Tata Group umbrella, finds itself navigating turbulent waters in Qatar as approximately ₹750 crore remains entangled due to delays in receivables and project execution. Pradeep Bakshi, the Managing Director and CEO of Voltas, shed light on the grim scenario, emphasising that certain contractors resorted to encashing bank guarantees in an unethical bid for swift gains, severely impeding the international project operations of the conglomerate in the December quarter.
Expressing concern over the unprecedented challenges faced, Bakshi highlighted the alarming situation in Qatar, where timely payments are amiss, and projects suffer from significant delays despite completion. Voltas, an MEP contractor, has fulfilled its contractual obligations, yet struggles with uncertified bills and outstanding payments. Bakshi lamented the absence of basic ethics in business transactions, stressing the imperative for timely settlements.
With dues mounting up to ₹750 crore and an additional ₹375 crore in bank guarantees at stake, Voltas finds itself grappling with substantial losses, particularly in the December quarter, where it reported a net loss of ₹27.60 crore. Bakshi iterated the company’s recourse to remedial actions, exercising caution in project selection, and gravitating towards reputable partners known for prompt payments to mitigate risks.
Despite the challenges in Qatar, Voltas remains steadfast in consolidating its foothold in the room air conditioner sector. Bakshi underscored the burgeoning demand, especially from smaller towns, buoyed by rising disposable incomes. With investments amounting to ₹1,000 crore earmarked for capacity expansion and setting up a compressor plant over the next five years, Voltas remains committed to meeting the evolving market demands.
Addressing concerns about funding, Bakshi reassured stakeholders of Voltas’ financial robustness while remaining open to borrowing if necessary. Additionally, the company’s joint venture with Arcelik, known as Voltas Beko, continues to thrive, reaffirming its leadership position in the air conditioner category and registering significant growth in other appliance segments.
Despite encountering setbacks in Qatar, Voltas maintains a strategic outlook, focusing on ethical business practices, prudent financial management, and market expansion initiatives to navigate through challenges and emerge resilient in the ever-evolving landscape of the HVAC and appliance industry.