Leading consumer durables companies have amped up dealer-level stocking in the January-March quarter, anticipating a hot summer and aiming to prevent last year’s supply shortages when demand outpaced supply. Additionally, companies reported pre-season growth in air cooler sales during the October-December quarter, driven by expectations of an early summer.
With February temperatures soaring unusually high, especially in north India, manufacturers and retailers of fans, air conditioners, refrigerators, and air coolers are gearing up early for another season of strong demand. Last year, the industry faced shortages of air conditioners and refrigerators as demand outstripped supply due to limited production and stock constraints.
The market leader for fans, Crompton Greaves, is looking to grow its share in the category in the coming quarters. Between October-December, the company saw the highest ever pre-season growth in its air cooler vertical.
Leading residential air conditioner maker Voltas has also shared a similar outlook, citing strong demand driven by early summer trends, infrastructure growth, and increasing consumer spending on cooling products.
"An anticipated strong summer demand and support from our in-shop demonstrators helped us achieve improved performance for all products. Both window and split air conditioners saw reasonable growth during the quarter," said Voltas Chief Executive Officer Pradeep Bakshi in a post-earnings call last month. The Tata group company was back in the black with a net profit of Rs 132 crore in Q3.
Voltas' Unitary Cooling Products (UCP) segment includes room air conditioners (RACs), air coolers, commercial refrigeration products like freezers and bottle coolers, as well as water dispensers and purifiers. Harshit Kapadia, Analyst, Elara Securities, noted that good growth in air coolers, visi coolers (see-through coolers), and glass-top freezers helped the company offset the slowdown in products like refrigerators.
"Despite Q3 being an off-season, the UCP segment continued to witness robust growth led by RACs as brands aggressively stocked in anticipation of strong summer demand," said Kapadia.
India’s changing climate has led to soaring temperatures, especially during the summer months. Heatwaves have become more intense and prolonged, making cooling appliances a necessity rather than a luxury for many households. As a result, the demand for air conditioners, refrigerators, and fans has surged as people seek respite from the scorching heat, according to market research firm Nielsen.
"Dealers are stocking up for the coming summer and we are ready with the new products that are to be launched for the season. We are expecting the coming quarter to be a promising one as market demand is likely to be strong," said BlueStar managing director B Thiagarajan.
He further added, "If the summer is good, even if 25 percent growth has to be achieved, we have enough raw materials. Right now, not only Blue Star, all players would have secured their components for the summer because things are planned in advance."
Companies have indicated that demand in the C&W (cooling and water) segment would remain strong, led by the infrastructure, industrial, and real estate sectors.
Havells CEO Anil Rai noted that stocking for air conditioners typically begins in January-February, while fan inventory builds up around late February-March. While it is still early to assess demand, he highlighted a more optimistic sentiment in the market this year compared to the previous season, which had started with lower confidence amid supply issues.
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