Air conditioner demand in India remains robust, driven by rising temperatures, delayed winter in the northern regions, and extensive usage, according to Morgan Stanley. The brokerage suggests a promising outlook for the Indian AC market, especially Voltas Ltd. and Blue Star Ltd. in the coming months.
The country’s offices, restaurants, theatres, and transport modes like cars, buses, and metro rail are also extending their usage of ACs, and the festive season has further fuelled growth, it said.
Morgan Stanley maintains an ‘overweight’ rating on Voltas, the Tata Group company that leads the room AC market with a 21% market share. The brokerage has set a target price of Rs 1,975 for Voltas, with an 18% upside. With strong AC demand trends and healthy festive sales expected to drive growth in the unitary cooling products segment, Voltas is poised to maintain its market leadership and benefit from the current momentum.
Blue Star, while not covered by Morgan Stanley, recently highlighted strong demand for room ACs during a media interaction, the note said. The company reported a 30% year-on-year growth in festive season sales during the third quarter, citing favourable market conditions.
Inventory levels remained reasonable as channels stocked up for the summer. Commercial AC sales, bolstered by manufacturing, data centres, and demand from smaller towns, were growing at over 20% annually, according to the brokerage.
Blue Star also noted the industry’s ongoing dependence on Chinese imports for electronic components and compressors despite government incentives under the Production-Linked Incentive scheme to support local manufacturing.
Voltas shares were trading 2.44% higher at Rs 1752.70 per share, compared to a 0.22% decline in the NSE Nifty 50 at 10:58 a.m. Nineteen out of the 39 analysts tracking the stock have a ‘buy’ rating on it, 11 recommend a ‘hold’ and nine suggest a ‘sell’, according to Bloomberg data. The average of 12-month analyst price targets implies a potential upside of 2.1%.
Blue Star shares were trading 2.30% lower at Rs 2,034.15 per share at the same time. Fourteen out of the 23 analysts tracking the stock have a ‘buy’ rating, seven recommend a ‘hold’, and two suggest a ‘sell’, according to Bloomberg data. The average of 12-month analysts’ price targets implies a potential downside of 7.7%.
. Read more on Markets by NDTV Profit.Sustained demand, coupled with a delay in onset of winter, suggests a promising outlook for the air conditioner market, the brokerage said. Read MoreMarkets, Business, Notifications
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