These AC stocks will save you from the heat of the market!
The indian Meteorological Department (IMD) has issued a warning of higher than normal temperatures and heat waves in the summer season this year. This is nothing new, as the temperature is already rising in India. Due to this, record sales of cooling products like air conditioners (AC), coolers and fans are expected this year.
In this situation, companies working in the cooling segment will benefit, especially market leader Voltas. An interesting thing is that the shares of the consumer durables sector rise even before the summer season. Will it happen this time too? Let us know the condition of the company and its future prospects.
Voltas market
Voltas, a Tata Group company, operates in three main business segments, including unitary products (UPBG). This segment sells room air conditioners, air and water coolers and commercial refrigeration products. Voltas has a 20.5 percent market share in the AC market. Refrigerators have a market share of 5.1 per cent, washing machines 8.3 per cent and semi-automatic washing machines 16.7 per cent. The UPBG segment contributes 63 per cent of the company's total revenue. Last year, Voltas sold more than 2 million AC units, the company's highest ever record. Apart from this, good growth was also seen in air coolers and commercial refrigeration products.
Future plans
Voltas plans to launch new products in view of the demand in the summer season. The company has set a capital expenditure of Rs 5 billion for compressor manufacturing. A new AC facility is being built in Chennai, which will start functioning from this summer. Voltas Beko is expanding its distribution network and focusing on e-commerce sales.
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