Despite the intense competition and existence of several multinational companies, Voltas has been able to increase its market share in room AC segment. During the first quarter of current financial year, which is also the busiest period for the AC makers in the country, Voltas was able to increase market share from 23.9% to 24.1%.
During the quarter, the company had raised the prices of some of its products slightly despite which the company was able to expand its market share. Revenue was mainly driven by a strong summer season and a delayed monsoon season. Though one of the late entrants into inverter AC segment, presently more than 50% of its revenue comes from inverter ACs. Launch of new products such as adjustable inverter AC and flexible AC also helped the company to achieve healthy revenue growth.
In the coming days the company will be executing EESL order for 50000 highly efficient 7-star split ACs to be sold in Delhi. Everyone will be closely watching consumers response to this new plan. Industry too will be anxious to know the response because this programme if becomes successful has the potential to keep the AC prices under check.
It should be noted that India has one of the lowest AC penetrations in the world, not only lower than global average but also behind many emerging markets. Lower penetration of air conditioners in India is mainly due to lack of continuous supply of quality electricity beyond major towns and cities. Though the government has set itself a target of lighting all the houses by this financial year end, continuous supply of quality electricity may not become a norm for some more years. Low voltage or fluctuations in voltage will affect the AC itself and also its efficiency which in turn acts as deterrent. Further, high purchasing and running costs and lower per capita income are also the major reasons for slower penetration of AC in the country. Availability of air coolers at much cheaper prices also come on the way of increasing the penetration of ACs in the country.