Cooling Industry Heats Up for a Sizzling Summer
Cooling Industry Heats Up : As temperatures continue to rise earlier than expected, India’s cooling industry is gearing up for what is anticipated to be one of the hottest summers in recent years. Manufacturers and retailers of air conditioners, refrigerators, fans, and air coolers are ramping up production and stocking levels to avoid last year’s supply shortages.
Industry Prepares for a Surge in Demand
With February already witnessing unusually high temperatures, particularly in North India, leading consumer durables companies have taken proactive measures. Dealer-level stocking has increased significantly in the January-March quarter to ensure adequate supply, a stark contrast to last year when demand outpaced availability due to supply chain bottlenecks.
Additionally, companies have reported a notable rise in air cooler sales during the October-December quarter—an early indicator of consumer expectations of a scorching summer. This pre-season growth reflects shifting consumer behavior, as many now prefer to purchase cooling appliances well in advance rather than wait for peak-season price hikes and shortages.
Market Leaders Respond Proactively
Crompton Greaves
A dominant player in the fan segment, Crompton Greaves is eyeing higher market share. The company saw record-breaking pre-season growth in its air cooler category during the October-December period, further solidifying its presence in the cooling market.
Voltas
Tata Group’s Voltas, India’s top residential air conditioner brand, also anticipates strong demand in the coming months. CEO Pradeep Bakshi emphasized that an expected surge in summer demand and strategic in-shop demonstrations have fueled performance across the company’s cooling product lines.
“Both window and split air conditioners saw reasonable growth during the quarter,” Bakshi noted in a recent post-earnings call. Voltas returned to profitability in Q3, reporting a net profit of ₹132 crore.
The company’s Unitary Cooling Products (UCP) division, which includes room air conditioners (RACs), air coolers, and commercial refrigeration products, saw robust sales even during the off-season. According to analyst Harshit Kapadia from Elara Securities, air coolers, visi coolers (see-through coolers), and glass-top freezers played a crucial role in offsetting the slowdown in traditional refrigerator sales.
Blue Star
Blue Star, another key player in the cooling industry, is optimistic about the upcoming season. CEO B Thiagarajan stated, “Dealers are stocking up for the coming summer, and we are ready with new product launches. We anticipate a promising quarter as market demand remains strong.”
He further added, “Even if we need to achieve a 25% growth, we have secured enough raw materials. Not just Blue Star, but all major players have ensured component availability for the season, given the lessons learned from last year’s supply constraints.”
Climate Change Driving Long-Term Growth
India’s changing climate has led to prolonged and intense heatwaves, making cooling appliances a necessity rather than a luxury. Market research firm Nielsen highlights that the surge in cooling product demand is not just seasonal but part of a broader trend as Indian households seek relief from extreme weather conditions.
Infrastructure expansion and rising disposable incomes have also contributed to a stronger market sentiment. Industrial and real estate sectors are fueling demand for commercial cooling products, ensuring that the Cooling & Water (C&W) segment remains a growth driver in 2024.
Dealer-Level Stocking and Consumer Trends
Havells CEO Anil Rai explained that stocking for air conditioners typically starts in January-February, while fans see inventory buildup in late February-March. This year, manufacturers and retailers are more optimistic compared to last season, which began with supply-chain uncertainties.
“We are witnessing a stronger consumer sentiment this year,” Rai remarked. “Companies are well-prepared, and there’s greater confidence in market demand.”
Financial Performance and Key Ratios
With major cooling product manufacturers experiencing significant growth, here’s a snapshot of key financial metrics:
| Company | Q3 Net Profit (₹ Crore) | Segment Performance | Growth Factors |
|---|---|---|---|
| Voltas | 132 | Strong UCP sales, RAC demand | Early summer, infra growth |
| Crompton Greaves | N/A | Record air cooler sales | Dealer stocking |
| Blue Star | N/A | Positive demand outlook | Inventory secured |
| Havells | N/A | Strong AC and fan demand | Consumer confidence |
Future Outlook: A Hot Market for Cool Comfort
With India bracing for another intense summer, cooling product manufacturers are set to capitalize on the growing demand. The industry has learned from past supply shortages and is better positioned to meet consumer needs with improved inventory management and strategic stocking.
As the mercury continues to rise, companies are betting on a scorching summer translating into a booming business. Whether it’s air conditioners, air coolers, or fans, the market is prepared to deliver relief—one cooling unit at a time.
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.