The AC sector is celebrating despite the warmth, which may not be good news for you. The early start of summer and aggressive channel stocking are likely to support strong volume-led growth in Q4FY25.
Between March and May, the Indian Meteorological Department has forecast an above-normal number of heatwave days in the majority of the nation. In comparison to the previous year, the majority of Indian cities have already had warmer January through March temperatures, which has increased hope over a bigger growth in AC volume.
Businesses in the cooling sector, which is expected to have another successful summer, will profit from this. Some players are in a better position than others, according to Kotak Institutional Equities, even though the majority of players have secured their compressor supplies for this season.
According to Blue Star’s management, the RAC market is anticipated to expand by more than 30% in Q4. According to Kotak Institutional Equities, this could be driven by 1) early indications of a good summer season and 2) aggressive channel stocking in light of last year’s stock-outs, concerns about compressor shortages, and pre-buying before expected price increases. “We would closely monitor secondary offtakes (considering the weak consumption sentiment), even though primary sales growth trends are encouraging,” the statement stated.
According to media reports, the non-renewal of foreign vendors’ BIS licenses may result in compressor shortages in India. “GMCC’s (China) and Highly’s (China) BIS licenses are both valid through January 2026 and June 2025, respectively. Compressor imports to India increased by +40% year over year between April 2024 and February 2025. This should guarantee that, at least for the current season, the industry should not encounter any significant supply issues,” the brokerage business stated. According to the study report, businesses that have imported compressors upfront should do better than those that have not, especially since domestically purchased compressors may have some impact on margins.
