Air Conditioners Heated Up - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Air Conditioners Heated Up

May 25, 2000

The Indian air conditioner segment, estimated at Rs 12 b, until now, has been confined to the unorganised sector. But this is largely due to the lopsided excise structure, which gave the unorganised segment an edge over the organised segment. In recent years, efforts to correct this anomaly have supported the big players like Carrier Aircon, LG, Samsung and Bluestar. The demand for air conditioners is predominantly institutional, which includes government and corporate (accounting for nearly 80% of the market). The rest of the demand comes from the household sector, which incidentally is the fastest growing sector in this segment.

The air conditioners market
Segment % of total
Central A/C 25.8
Windows A/C 48.0
Mini-splits 16.0
PAC & Ducted Splits 10.2
Total 100.0

Future Prospects

  • The excise duty on the air conditioners has come down from 60% in FY94 to 30% in FY00. This has benefited the major players in terms of both prices and market share. The unorganised sector has been consistently losing its market share to their counterparts.
  • The companies are also expanding capacities by 0.25 m in the next two years bringing the total capacity to 0.9 m.
  • The companies are introducing energy-saving models of air conditioners, which could initiate interest among the consumers who are wary of high running costs.
  • The other factors that could stimulate demand is the development of software technology parks, which have large demand for air conditioning equipment. Companies like Carrier Aircon and Bluestar, the market leaders in central air conditioner market should benefit from this.

    Central AC market shares
    Company % share
    Carrier 12%
    Voltas 22.0%
    Blue Star 41.0%
    Suvidha 5.0%
    Thermax 6.0%
    Others 14.0%
    Total 100.0%
  • The aggressive brand building exercise and distribution strategies by companies like LG, Samsung and Carrier to tap rural demand should improve topline growth. With all these factors, the air conditioner market is headed for a good year ahead.

Equitymaster requests your view! Post a comment on "Air Conditioners Heated Up". Click here!

  

More Views on News

Sorry! There are no related views on news for this company/sector.

Most Popular

Hotel Stocks Will Reward Investors (Fast Profits Daily)

Jun 8, 2021

This is why I'm bullish on the hotel and hospitality sector.

Don't Break These 5 Intraday Trading Rules (Fast Profits Daily)

Jun 1, 2021

To become a better intraday trader, follow these rules religiously.

Is the RBI's 'Bubble Talk' Signalling a Market Crash? (Profit Hunter)

May 31, 2021

Is the Indian central bank correct in warning you about a market crash?

Rs 2 Trillion Stimulus Coming to a Stock Market Near You (Profit Hunter)

Jun 2, 2021

Get ready to profit from a massive stimulus that you've never seen before.

More

India's #1 Trader
Reveals His Secrets

Secret To Increasing Your Trading Profits Today
Get this Special Report,
The Secret to Increasing Your Trading Profits Today, Now!
We will never sell or rent your email id.
Please read our Terms

S&P BSE CONSUMER DURABLES


Jun 11, 2021 (Close)

S&P BSE CONSUMER DURABLES 5-YR ANALYSIS

COMPARE COMPANY

MARKET STATS