AC prices in India are expected to rise due to increased raw material costs and new energy efficiency regulations set for January 1, 2026. Input costs for AC manufacturers have surged by 14-16%, the highest increase since 2011. The rise is driven by escalating prices of copper, aluminum, and steel.
Key facts:
- The new energy efficiency standards will require manufacturers to produce more complex and efficient units.
- The pressure on prices is expected to continue for the next 12-18 months.
- Consumer electronics companies, including Voltas, are adjusting prices due to these rising costs.
Veer S. Advani, MD of Blue Star Ltd., stated that AC manufacturers are feeling the pressure of rising input costs and new energy efficiency regulations. The situation is concerning for consumer electronics manufacturers.
If prices rise too much or economic uncertainty increases, demand may decrease. The sector has seen lower profit margins during past commodity price spikes like in 2011.
Analysts are optimistic about Blue Star Ltd. in the long term but see challenges in the short term due to costs and stock valuation. Companies are exploring cost-saving methods to mitigate the impact of rising costs.
