The Indian Meteorological Department (IMD) has predicted higher-than-average temperatures and an increased number of heatwave days across the country this summer. Following an unexpectedly warm February, India is already experiencing a sharp rise in temperatures.
As temperatures continue to climb, investors should prioritize companies with a robust summer-focused portfolio. The demand for air conditioners, air coolers, refrigerators, and beverages is expected to surge over the next two quarters.
FMCG players
In the FMCG sector, Varun Beverages is well-positioned to make the most of the upcoming summer season. As the dominant bottler of PepsiCo beverages in India, the company holds a strong market presence. To tap into the seasonal demand, it has expanded its high-growth energy drink portfolio with new flavors. Favorable market conditions, a diversified product mix, and a growing global footprint are set to fuel its growth and profitability.
Likewise, Emami, a leader in the cooling hair oil segment with its Navratna range, is poised to gain from the harsh summer ahead. A strong recovery in rural demand, which accounts for nearly 50% of its sales, further strengthens its position. The April-June quarter marks the peak season for Emami’s summer-focused products, with the Navratna range contributing 36% of sales and Dermicool adding another 10%. This seasonal demand surge is expected to drive significant volume growth in the coming quarters.
Air Conditioner and Consumer Durables Sector
The early arrival of summer in 2025 is expected to drive strong demand for Room Air Conditioners (RACs), following a similar trend from last year. However, short-term market disruptions could arise due to unexpected shortages of compressors and copper. This is largely due to the expiration of BIS certification for a key Chinese manufacturer, temporarily halting shipments to India. In response, domestic suppliers have ramped up production to meet the growing demand, while most Indian AC manufacturers have secured alternative supply channels to minimize the impact.
Among leading AC brands, Voltas and Blue Star are well-positioned to benefit from the rising summer demand. Inventory buildup has already begun in the southern region, with other regions expected to follow suit. Notably, Blue Star has been rapidly expanding its market share, reaching 14% as of December 2024. Meanwhile, Havells’ Lloyd, which contributed 15% to Q3FY25 revenue, is also poised for strong growth this season.
Power Sector Beneficiaries
With rising industrial and commercial power consumption, along with soaring temperatures, Indian Energy Exchange (IEX) is set to gain significantly from increased electricity trading. Holding an 83-84% market share in this segment, IEX is well-positioned to capitalize on the growing energy demand.
The company’s strategic expansion into renewables, gas, and carbon trading further enhances its long-term growth potential. Additionally, regulatory reforms aimed at boosting market efficiency and liquidity are expected to provide additional support. The projected 25% volume growth in FY25 underscores the accelerating shift toward clean energy, reinforcing IEX’s strong earnings outlook.
