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Voltas RAC Demand Recovers, Margins Face Pressure
5 Jan
Summary
- Voltas anticipates improved Room Air Conditioner demand in Q3 and Q4.
- Near-term margins are pressured by high raw material inflation.
- Voltbek is close to leading the semi-automatic washing machine market.
Voltas has indicated that the challenging period for Room Air Conditioner (RAC) demand has concluded, with expectations of a sequential recovery in the third and fourth quarters. The company remains confident in its ability to sustain and improve its market share in RACs, even as channel inventory levels continue to be high.
Despite the positive outlook on demand, Voltas anticipates that profit margins in the near term will remain under pressure. This is attributed to ongoing high raw material inflation and the additional support being provided to channel partners to clear existing inventory. The company is also yet to finalize its pricing strategy for new Bureau of Energy Efficiency (BEE) rated products.
In parallel, Voltas's domestic EMPS business is performing strongly, delivering steady profitability. Furthermore, Voltbek is nearing market leadership in the semi-automatic washing machine segment, with other product categories showing high single-digit margins.
