According to global brokerage firm Jefferies, the India Meteorological Department’s forecast of a monsoon that could be 10% below normal, coupled with rising El Niño risks, may support demand for room air conditioners and other summer-centric appliances.
Industry data indicates that room air-conditioner volumes grew more than 40% year-on-year in May, while overall industry value growth was estimated at 25-30%.
Jefferies also believes recent price hikes could help support profitability and expects sales growth of 15-16% for Voltas and Blue Star in FY27.
Speaking to CNBC-TV18, PG Electroplast Managing Director Vikas Gupta said the company has witnessed a stronger start to FY27, with April and May performance surpassing that of the corresponding period last year.
The company had faced a challenging FY26 due to weak consumer demand, supply chain disruptions and currency-related pressures. Gupta said inventory levels have now normalised, while initiatives such as greater localisation and tighter inventory management are helping improve operational efficiency.
Although management expects FY27 to be better than the previous financial year, Gupta said the company remains cautious about issuing formal revenue guidance given the uncertain macroeconomic environment.
Meanwhile, Havells India had highlighted in its March-quarter investor presentation that revenue growth at its Lloyd business was affected by a high base and a delayed start to the summer season.
Despite healthy demand trends, profitability remains a concern for the industry. Blue Star Managing Director B Thiagarajan recently said the room air-conditioner industry may have recorded over 50% growth in May, driven by strong summer demand.
However, he cautioned that rising raw material costs, higher fuel prices and subdued consumer sentiment are weighing on margins.
According to Thiagarajan, manufacturers have not been able to fully pass on cost increases to customers, which could lead to pressure on operating profitability in the current quarter.
He added that while demand has remained strong, uncertainty over future consumption trends and rising input costs continue to pose challenges for the industry.
