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Cooling product manufacturers are seeing a rebound in their stock prices amid expectations of a pickup in sales during the festive season. Shares of Voltas Ltd, Blue Star Ltd, and Havells Ltd have risen 12-25% so far in September. 

Air conditioner sales in the peak summer season were hit by lockdowns. Since the June quarter, which is the most important sales season for AC manufacturers, was a washout, FY22 sales are likely to remain lower than those seen in FY20. Inventory at dealers’ level also remained slightly elevated. 

However, the festive season demand may provide some respite and boost sales for AC manufacturers. “With a washout summer season and lower imports of finished goods, most brands are left with higher inventory in the form of raw material," said analysts at Motilal Oswal Financial Services Ltd . With channel inventory at a normal level, there is a scope for brands to push sales at the onset of the festive season (Dussehra and Diwali), they added.

Meanwhile, the companies are also benefitting due to import bans on components and AC units from China imposed last year. The large manufacturers and brands having ramped up domestic manufacturing remain beneficiaries and continue gaining market share from import-dependent sellers. 

Havells already had commissioned one facility for manufacturing Llyod range of Air conditioners and cooling products last year and is looking at setting up another facility. Voltas Ltd, Blue star Ltd etc, most have scaled up their own manufacturing. Besides the government's production-linked incentive scheme is likely to help speed up component manufacturing and benefit contract manufacturers like Amber Enterprises Ltd and others. 

Analysts say brands like Blue Star and Lloyd have also expressed interest in the PLI scheme. This will help drive their prospects as well. Overall, import bans are accruing benefits, they added.

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