Godrej Appliances, a key player in the home comfort market and a part of the Godrej Enterprises Group, is riding high on an impressive surge in air conditioner (AC) sales. After experiencing a remarkable 100% growth last year, the company is now forecasting an exciting 50% year-on-year increase in demand for this summer season.

Strong Market Presence

In a recent discussion, Kamal Nandi, the Executive Vice President and head of Godrej Appliances, highlighted the company’s remarkable journey. "We are proud to have reached the milestone of becoming a billion-dollar enterprise, with nearly 48-49% of our revenue generated from AC sales," he shared.

Ambitious Market Share Goals

Nandi outlined the company’s strategic vision for the future, stating, "We finished FY24 with a 6.5% market share, and we Projected to hit 10% by the end of FY25." Looking further ahead, he aims for a 12-13% market share by FY26, positioning Godrej among the top three manufacturers in the sector.

Innovative Product Launches

In a move to solidify its market position, Godrej recently unveiled nine new smart AC models, increasing its lineup to 67 models. The company is also venturing into the commercial AC sector with innovative tower and cassette designs. Prices for these smart AC units start at Rs 42,900 and feature cutting-edge technology, including AI capabilities, IoT connectivity, and WiFi controls, with impressive cooling capacities ranging from 3 to 4 tons. Customers can find these products at authorized retailers and various e-commerce platforms across the country.

Industry Outlook

Discussing broader industry trends, Nandi noted last year’s significant 66% surge in demand but anticipates a more tempered 35% growth across the industry this year due to the elevated baseline. This projection suggests a total of approximately 14 million AC units sold in FY25, with an increase to 18 million units by FY26.

Supply Chain Challenges

Despite the optimistic demand forecast, the industry is grappling with supply chain issues, particularly concerning the availability of compressors and copper tubes. These challenges arise from stringent quality control regulations and import restrictions from China. To address these issues, the Indian government initiated a Production-Linked Incentive (PLI) scheme in FY21 to foster domestic manufacturing.

"Prior to the PLI initiative, India relied on imports for about 75% of its AC components. This dependency has now reduced to approximately 35%," Nandi explained. He remains optimistic that by FY27, India will achieve self-reliance in compressor manufacturing.

Expansion Plans and Customer Focus

Godrej Appliances operates two state-of-the-art manufacturing facilities located in Mohali and Pune, and the company is actively seeking to expand its production capabilities. Nandi emphasized, "We are fully prepared for the upcoming year and are already planning our next phase of expansion."

The company is keen to cater to a diverse customer base, offering ACs at various price points ranging from Rs 30,000 to Rs 50,000. Special attention is being directed towards smaller cities, where demand for both premium and budget-friendly ACs is on the rise. To enhance its market reach, Godrej has established around 140 exclusive brand stores in these locales, thereby fortifying its distribution network.

With ambitious growth plans and a commitment to innovation, Godrej Appliances is poised to make a significant impact in the AC market this summer and beyond.