MOFSL Group

Alumni Network

Group Websites

nifty 22,147.00

151.15 (0.69%)

19-Apr-2024 | EOD

sensex 73,088.33

599.34 (0.83%)

19-Apr-2024 | EOD

MOFSL 2,232.00

146.35 (7.02%)

19-Apr-2024 | EOD

Industry Update Back

Room Air Conditioners: New energy ratings come into effect from January 2018

21-Sep-2017

Pre-buy likely, as prices typically go up 8-10% with each rating change Rating changes are usually followed by price hikes. Fence-sitting consumers usually rush to buy before price hikes are effected. Voltas' sales volume grew 45% in 3QFY14 (ratings changed with effect from January 2014) and 19% in 3QFY12 (ratings changed with effect from January 2012). With the impending rating change from January 2018, pre-buying is likely in 3QFY18. Volume growth for 3QFY18 would also be boosted by a weak base – demonetization had led to a decline in air conditioner (AC) sales in 3QFY17. On the flip side, there could be some destocking by dealers, starting 3QFY18, as they begin clearing old stock before the new ratings to come into effect.
A logical outcome of price hikes following rating changes is subdued volumes post the price hikes. Voltas' sales volume grew just 6% in 4QFY14 and declined 3% in 4QFY12. The subdued volumes are both because of pre-buying in the earlier quarter and impact of higher prices on demand. We would expect a similar situation to play out this time as well.

view report Download report open an account trade now