India's heat waves drive air conditioner sales, defying consumer slowdown

India’s air conditioner (AC) market is witnessing a significant sales surge, driven by record heat waves and forecasts of hotter weather. Blue Star Ltd. anticipates up to 30% growth in summer sales, particularly in smaller cities, as more people become accustomed to air conditioning in public spaces like hospitals, malls, and restaurants. Despite frequent heat waves, only 10% of Indian households own an AC, compared to 68% in China and 38% in Thailand. Accelerating urbanization and poor ventilation in cramped housing further fuel the demand, with the International Energy Agency projecting a rise from 93 million units in 2024 to 240 million by 2030. 

Companies like Voltas Ltd. are also expanding into tier-II and tier-III cities, with sales volume rising 35% from April 2024 to January 2025. Consumer financing options, including ‘buy now, pay later’ schemes, account for about 40% of AC purchases, boosting accessibility. Additionally, affluent consumers opt for advanced, tech-enabled systems with smart features. Nomura analysts highlighted Voltas’ market-leading growth, with shares rising 30% in the past year, while Blue Star’s stock soared over 70%. With the India Meteorological Department predicting more heat waves until May, the AC market’s momentum is expected to continue. 

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.