Voltas is the biggest player in the Air Conditioners, and it has hinted that it is looking to hike prices, but is waiting for the demand to improve.- There is also the fear of the government raising the import duties, pushing the company to hike prices. They are also gradually developing alternative sources of raw material domestically.
- Voltas management remains confident that it will gain more market share, especially in room air conditioners.
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The company said it would need a 3-4% price hike after it finds an alternative source of raw material domestically, according to the IIFL Securities report dated December 4.
The management’s confidence may stem from its latest quarterly report, which impressed the street with better performance than its peers like BlueStar, Whirlpool.
In the second quarter, the company recorded 14% overall volume growth led by a 1% jump in room air conditioners (ACs), 20% in commercial refrigeration products, and 28% in air coolers.
Even with the possible price hikes, Voltas management remains confident that it will gain more market share, especially in room air conditioners (AC). Healthy festive demand and steady distribution reach, along with their product expansion plans could augur well for the company.
Brokerages remain cautious
This optimism reflects in the company’s share price as well, which has rallied over 49% since the beginning of the second quarter. However, despite management’s positive outlook, brokerages remain wary about its near-term growth.
The IIFL report highlighted that its “medium-term outlook is impacted by the subdued awards pipeline, even as Voltas remains cautious about booking new orders.”
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