“The last 15 days of March, the summer especially in the north has been quite low, and that’s impacted the room air conditioner (RAC) sales,” Sahay says, pointing to sluggish demand.
With temperatures yet to turn harsh, the outlook remains uncertain. “May is crucial for the northern summer, where we are seeing the summer is not so harsh, and that’s impacting the RAC sales,” he adds.Also Read: ‘Not in my career of over four decades’— Blue Star MD is bracing for the unusual
Companies with broader portfolios are not dependent on one season. “Beyond RAC, they have levers of refrigerator and the washing machine,” Sahay explains.
Diversified products bring in added revenue like annual maintenance contracts (AMC). Similarly, companies with enterprise clients remain relatively more insulated from fluctuating demand.
Even though stocks have corrected and valuations appear more reasonable, uncertainty around the season continues to weigh on sentiment.
“All RAC players have corrected valuations 35 to 37 times, which looks pretty good, but the risk of a summer is actually hampering,” he says.
AC makers may see cuts to volume growth estimates if the summer sales are less than expected.
In contrast, Sahay sees stronger visibility in cables and wires despite some near-term softness. “The opportunity from the data centre or the high-voltage direct current (HVDC) is going to deliver a good volume growth in FY28,” he says, highlighting KEI Industries as preferred long-term bet.
“I prefer KEI because they are a pure play on the cable business and ₹2,000 odd crore of capex is going to get live by this financial year and the opportunity arises from that capex is around ₹6,000 odd crore addition in their revenue,” Sahay said.
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