AC demand in India expected to rise significantly

Demand for air conditioners in India is expected to increase significantly due to rising temperatures and heatwaves. The India Meteorological Department (IMD) has forecasted above-normal summer temperatures this year, which will likely lead to record sales of cooling products. This increase in temperature will drive up the need for air conditioners, coolers, and fans. Analysts expect strong demand for these products in the upcoming months. Manish Valecha, Deputy Head of Research at Anand Rathi Institutional Equities, believes that the air conditioning industry could grow by 30-35% year-over-year in FY25. This growth will be supported by higher disposable incomes and favorable financing options for consumers. Companies such as Bluestar, Voltas, and Havells are anticipated to benefit from this trend. Last year, these brands saw substantial sales, and the market sentiment remains positive this year as dealers have stocked up early to meet demand. Valecha predicts that air conditioning companies will report strong performance in the fourth quarter. Stocks of these companies might rise by 10-12% as prolonged heatwaves are expected. He highlights Bluestar, Voltas, and PG Electroplast as top investment picks in the cooling sector. Voltas reported solid revenue growth but faced challenges with shrinking profit margins. Despite this, the company remains optimistic about strong consumer demand. Blue Star has a long history in India and plans to expand internationally. The company expects significant growth in air conditioner sales this summer despite a robust market last year. PG Electroplast is another key player in the market, specializing in air conditioners and other consumer products. The company is the second-largest in room air conditioning sales, serving a wide range of customers. Overall, the air conditioning market in India is gearing up for a hot summer, and these companies are positioned to thrive.