AC Demand set to surge in India: Amber Enterprise, Voltas could give 17-23% return in1 year

compressor shortage seems to have been well managed.
The industry faced a shortage of high-value intermediaries, i.e., compressors and copper during 3QFY25 which came as a surprise to the manufacturers as BIS certifications for certain players were not extended and imports got impacted.

However, most players have addressed this issue with alternate supply arrangements, and it is expected that the situation would ease further in the coming months. Secondary sales too have started to pick up in the South and West regions.

The AC Industry has seen good demand so far in FY25, driven by the rising temperature and increasing disposable incomes. With annual AC demand expected to grow at a healthy CAGR of 19% (volume) over the next years, the demand for high-value components such as compressors and copper tubes would also grow correspondingly.
However, as mentioned earlier, the industry was impacted by the shortage of AC Compressors during Jan’25 due to a number of reasons. The peak production for AC occurs normally during the Dec-June period and thus the shortage of these intermediaries could have resulted in production loss for a few players.

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Even still, this problem was well managed with stocked inventory and alternative suppliers such as Highly and GMCC. Among the domestic AC OEMs, major players like LG and Daikin have in-house compressor manufacturing units and were better placed.
The industry is handling this compressor shortage via imports from other countries such as Taiwan, Japan, and Thailand