The India room air-conditioners (RAC) market is likely to grow at a CAGR of 12 per cent to reach ₹50,000 crore by FY 2028-29, Tata group firm Voltas said in its latest annual report.
According to Voltas, the competition in the Indian RAC market has “intensified” with the presence of homegrown and leading foreign players.
Moreover, the competitive "intensity is going to increase" further in the near future, the company said while discussing challenges and opportunities.
Factors like increasingly hot summers, rising disposable incomes, and the quest for a better lifestyle with easy access to consumer finance are likely to drive growth for this room air-conditioner segment.
Voltas sold over 2 million AC units in 2023-24, which, according to the company, was the highest number of ACs ever sold by any brand in a single year.
"Voltas also sold 1 million AC units in a short time frame of 110 days from January 1, 2024, to April 20, 2024.
This season several companies have reported over two-fold growth in April and May as sales skyrocketed in the blistering summer, when the mercury was touching around 45 degrees.
" Moving ahead, Voltas aims to reinforce its market leadership through the expansion of Exclusive Brand Outlets (EBOs) and other channels," it said.
Besides RAC, competitive intensity is also going to increase in Commercial Air Conditioning (CAC) where leading foreign players have started focusing on this sector.
"The demand for commercial air conditioning is increasing across industries and commercial establishments, and driven by a focus on comfort and sustainability," the report said.
Earlier, the Consumer Electronics and Appliances Manufacturers Association had said that this year, it expects record sales of RAC, taking the annual sale of around 14 million units in 2024.
However, Voltas, in its report, also said the recent implementation of QCO (Quality Control Orders) norms affects the imports of components, which pose challenges for the industry.
Still, the country’s air conditioning industry is highly dependent on imports for components, which is around an average of 65 to 70 per cent of the product value.
Over commercial refrigeration (CR) products, Voltas' annual report stated it will continue to grow over 10 per cent per annum till FY 2028-29.
In this segment, "many of the product categories are likely to register high double-digit growth", it claimed.
"Under the 'Make in India' initiative, many brands have set up new facilities and expanded local manufacturing. With this large local manufacturing base in key categories, competition has become intensive, leading to market share and profitability challenges," it noted.