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Informist, Friday, Aug. 8, 2025

 

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--Voltas: Currently holding inventory of 3-4 months
--CONTEXT: Comments by Voltas mgmt in post-earnings concall with analysts
--Voltas: Hope to liquidate inventory in festival season, next summer
--Voltas: Sales channels laden with inventory of 2 months
--Voltas: Will not resort to discounts to clear inventory overhang
--Voltas: Will roll out AI-powered air conditioners soon
--Voltas: AC industry declined 35-40% YoY in Apr-Jun
--Voltas: Looking at tactical cost control to improve profits
--Voltas: Focused on retaining market leadership in ACs going ahead

 

By Avishek Rakshit & Taniva Singha Roy

 

KOLKATA/MUMBAI – Laden with an inventory overhang on account of mismatch between the projection and the actual outcome of air conditioner sales, Voltas Ltd. is betting on the upcoming festive season and the summer next year to clear its stockpile. At the same time, the company is reducing costs to hold onto its profits for the current financial year.

 

"Talking specifically about brand Voltas, we are carrying an inventory of about three months or so, three to four months at best. And as far as trade partners are concerned, they are carrying inventory on an average of about two months," Pradeep Bakshi, the company's managing director and chief executive officer, told sector analysts in a conference call while discussing Voltas' financial results for the June quarter.

 

Bakshi said that Voltas anticipated good demand for air conditioners in the summer season this year after a good summer season in 2024-25 (Apr-Mar). With plans for "big sales", the company had augmented its production capacities. However, the summer this year was cut short on account of the early onset of the monsoon season and summer rains which brought down the mercury across parts of India. As a result, Voltas' sales of cooling products fell substantially by 24.6% in the June quarter at INR 28.7 billion and the company is now faced with an inventory overhang.

 

"I am hoping that the festival season and the second summer should be looking up and we will be able to make up for these losses. So, hopefully, these inventories will get liquidated in an automatic way rather than, I am not looking at discounting in a big way, to be honest," Bakshi said in response to whether Voltas will resort to offering iscounts on its unsold inventory to clear the stocks.

 

Laden with the challenge of substantial inventory and losing sales in the peak season, Voltas is now focusing on cost-cutting initiatives across all of its business verticals to improve its profits for the full ongoing financial year.

 

"We are carrying out a lot of cost improvement initiatives across our business verticals. And looking at all our overheads line by line and seeing as to how can we improve on the cost and save when the business is not as good as what we would have expected. We want to save on the cost," Bakshi said.

 

The top official said that the focus of the company for the rest of the ongoing financial year is also to improve its market share and continue to maintain its position as the largest air conditioner seller in the country. In the June quarter, although Voltas gained market share on a month-on-month basis, it actually lost market share on an on-year comparison.

 

For instance, Voltas' market share in April was 16.9% which improved to 17.9% in May, and further went up to 19.3% during end of June. However, during the end of June in FY25, Voltas' market share was 21.2%. For Apr-Jun as well, as against the market share of 17.8% in the June quarter of the current financial year, Voltas' market share was 19.5% in the year-ago quarter.

 

"We are the brand leader for more than a decade now. Right from 2013 onwards, we are retaining our leadership position and continuously, we are trying to extract more and more market share," Bakshi said.

 

After launching internet-of-things-enabled air conditioners like other industry players, Voltas is working on rolling out artificial intelligence-powered air conditioners.

 

"Our team is also developing some new products, which at the moment are in the initial stage, and I don't want to share in public. After a few months, you'll get to see our AI-enabled series will be introduced in the market on the AC front," the top official said.

 

Bakshi is also focussing on improving sales of home appliances like washing machines and refrigerators which are sold under the Voltas Becko brand, owned jointly by Voltas and Turkish multinational company KOC Holding A.S.

 

Voltas Becko currently holds an 8.6% market share in washing machines and 7.2% market share in refrigerators, which the company targets to increase to at least 10% in each of these categories at the earliest.

 

Friday, shares of Voltas closed 0.33% down at INR 1,304.90 on the National Stock Exchange. End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Deepshikha Bhardwaj

 

 

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