As India gears up for a scorching start to the summer, demand for ice-creams, beverages, cooling oils, and air-conditioners is likely to rise, and analysts said companies can capitalise on the opportunity by increasing capacity utilisation and launching new products.
Nitin Gupta, an analyst at Emkay Global, predicted a surge in demand for ice-creams and beverages, especially during the peak summer season.
Last year, growth in the beverage and ice-cream portfolio was subdued because of unseasonal rains in April, as highlighted by Ravi Jaipuria, chairperson of Varun Beverages, during an earnings call. Varun Beverages is a franchisee of PepsiCo.
Hindustan Unilever reported that its ice-cream portfolio faced challenges in Q1 due to a high base in the previous year and the impact of unseasonal rains in April, as mentioned during its earnings call.
Amit Purohit, an analyst at Elara Capital, expects improved growth rates this year, particularly for Varun Beverages and Dabur, which makes Real juices.
After a slowdown in the sale of consumer durables such as ACs during the peak summer season last year due to adverse weather conditions, companies such as Blue Star reported strong demand in Q2 and Q3, compensating for the revenue shortfall.
The India Meteorological Department predicted above-average minimum temperatures for March, attributing it to the prevailing El Niño conditions, a weather system that increases temperatures globally. Later in the month, temperatures are projected to surpass normal ranges.
Telangana, Andhra Pradesh, and north interior Karnataka, along with several regions of Maharashtra and Odisha, are anticipated to experience more frequent heatwaves than usual.
Analysts suggested that companies can capitalise on the hotter season by increasing capacity utilisation and launching new products. However, they advised against overstocking inventory in case of a weaker-than-expected summer.
Varun Beverages, which manufactures, distributes and sells a range of carbonated soft drinks, has ramped up its capacity utilisation and remains optimistic about the upcoming season. The company increased its capacity by 45 percent over CY2022.
Voltas, the maker of products including air-conditioners, air coolers, and refrigerators, is gearing up for growth by introducing new product lines. Voltas executives expressed confidence in their initiatives and launches, aiming to outperform the market and strengthen market share in a sustainable manner.
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