Mercury is touching near 50 in some parts but these guys aren't complaining
The heat is on! And no one eagerly awaits the summer more that the air-conditioning companies.
Venkatesh Balasubramaniam and Atul Tiwari at Citi Research group said in a report on May 11 that the period between March and May contributes nearly 2/3rd of the annual sales in the ac industry, and this year the heat wave has come ahead of its usual time and is stronger than usual.
Global warming has contributed significantly to the earnings of this sector, making AC companies' prospects better.
Temperatures in many regions in the country, including New Delhi, Bengaluru and in Gujarat have soared way beyond 40 degrees Celsius.
"The AC industry had a strong Mar'16 due to soaring temperatures in South India (Andhra Pradesh, Telangana, Tamil Nadu and Kerala). In April, Eastern India followed with high temperatures in West Bengal, Bihar and Orissa. Post this the heat wave has moved on to the North (New Delhi, Rajasthan & Uttar Pradesh), which has all contributed to robust sales in the these months.
Going ahead, the report says that "we are positive about growth in rural markets for both ACs and air coolers post monsoons."
For Voltas, the report says, “industry sales will grow to more than 4 million units in FY17 (compared to 3.6 million units in FY16) and Voltas expects to grow 15-20%,” the report said.
This sales growth will be aided by Voltas' air coolers, a new entrant in the industry, which contributed 0.1 million units in FY16. The company is targetting to sell 0.25 million units in this fiscal.
Voltas, a Tata group company, is a leading participant in India's Heating, Ventilation and Air Conditioning (HVAC) market, with a nearly 28% market share in electro-mechanical projects.
Capitalising on the heat
Taking advantage of the soaring heat, Voltas launched a new range of Acs in New Delhi, on March 15, 2016 with the proposition of ‘Run 2 ACs at the cost of 1 AC’.
“The new ACs use ‘steady cool’ compressors and run on a ‘two-stage inverter’ technology which saves power,” said the Citi Research report.