AC Company Stocks: Which Has The Highest Return On Investment Among Them?
Air Conditioning Companies in India: An Overview
Our economy is made up of several various industries, including banking, IT, pharmaceuticals, the airline industry, agriculture, and more. Every industry is always changing and might perform differently at different times. For instance, the Covid-19 epidemic created several potential prospects in industries like technology and medicine.
Sector investing may assist you in pursuing growth, diversifying your portfolio, and risk management by providing tailored exposure to the stocks of businesses in particular economic sectors. One such sector is the electronic sector. Today we shall be talking about AC manufacturing companies in particular of the electronic sector. Let us understand the basics of the same.
Air Conditioner Industry in India
The early start of summer in 2022 has led to large main and secondary volumes for goods like air conditioners, fans, and air conditioners. According to a PhillipCapital analysis, price increases led to reduced volumes in January and February but increased in March as the summer season began earlier than anticipated amid stronger consumer mood.
Since the beginning of March, shares of the top AC businesses have increased between 5 and 24 percent against this background, with Johnson Controls - Hitachi Air Conditioning India topping the pack. Voltas, which contributed 23%, came in second place. While the Nifty50 rose by 6% over the same period, Whirlpool, Amber Enterprises, Blue Star, and Voltas all had gains of 4–8%.
The data presented also reveals disagreement among experts on the price development of these equities. The best investment remains Whirlpool, which has a target price of Rs 2,407 and an average upside of 44%. Earlier, the stock was trading on the BSE for Rs 1,675. The average target prices for Hitachi and Amber Enterprises indicate returns of 17% and 7%, respectively. On the contrary hand, Blue Star has a 40% potential downside.
Factors to Consider Before Investing in AC Stocks
- Financial Strength: If you decide to invest in a certain sector of the economy based on the records it established that year, you must research the financial strength of the businesses in that sector. You must determine if the firm will be able to pay its debts and whether it has the potential to become profitable in the future.
- Risks: Before choosing an investment, your risk tolerance must be a key consideration. Some industries could seem very alluring, but they come with a lot of danger. Before making an investment, you should carefully examine the facts if you are an investor who cannot afford to take a significant risk with your portfolio.
- Your Financial Objectives: It is crucial that as an investor, you should not make decisions based on the herd rather than according to your investment objectives. If you are a long-term investor, you should focus on industries that won't go out of style in the future; nevertheless, if your goal is short-term profit, a little stock manipulation won't harm you.
Listed AC Companies in India
Let us understand the fundamentals of some of the best AC manufacturing companies in India as of the year 2022.
Voltas is the biggest air conditioning business in India and one of the most well-known companies for engineering solutions with a focus on project management. As one of the most reputable and trustworthy engineering solution providers, Voltas plays a crucial role in the development of the nation's infrastructure and exports their unmatched expertise across the technology, construction, engineering, mining, cooling and ventilation, textiles, infrastructure projects, and manufacturing sectors.
The following table represents some of the current statistics about Voltas Ltd as of 14 Oct 2022
|Market Cap||23,066 Cr.|
|Return on Equity (ROE)||12.88 %|
|Sales Growth (3Yrs)||7.59 %|
|Current Promoter holdings||30.30 %|
|Debt to Equity Ratio||0.08|
|Price to book value (PB ratio)||5.64|
With a chain of 32 offices, 5 cutting-edge production facilities, 2800 workers, and 2900 channel partners, Blue Star is India's top provider of commercial refrigeration and air conditioning. The organization has 5000 storefronts for room air conditioners, package air conditioning systems, chillers, cold rooms, and refrigeration systems. It also employs 765 service technicians who serve consumers in over 800 locations.
Many corporate, commercial, and residential customers of the company have their cooling needs met by Blue Star Ltd and this makes it one of the largest ac firms in India.
The following table represents some of the current statistics about Blue Ltd as of 14 Oct 2022
|Market Cap||8,037 Cr.|
|Return on Equity (ROE)||22.72 %|
|Sales Growth (3Yrs)||11.29 %|
|Current Promoter holdings||38.76 %|
|Debt to Equity Ratio||0.46|
|Price to book value (PB ratio)||9.27|
Amber Enterprises India Ltd is a well-known solution supplier in the Indian air conditioner OEM/ODM industry. It has a significant position in the RACs entire unit and trades in main RAC components, with 10 production sites spread across India focused on various product sectors. Amber is well-positioned with its backward integration to extract the fundamental deliverables in terms of quality, cost, and delivery, with competence in components such as sheet metal components, heat exchangers, system tubing and motors and injection molding components.
The organization provides improved energy efficiency as well as experience in indoor, outdoor, split, and window air conditioners. The firm sells both alternating current and non-alternating current components. The company is India's fourth-largest ac maker.
The following table represents some of the current statistics about Amber Enterprises India Ltd as of 14 Oct 2022
|Market Cap||4,889 Cr.|
|Return on Equity (ROE)||9.96 %|
|Sales Growth (3Yrs)||35.64 %|
|Current Promoter holdings||44.02 %|
|Debt to Equity Ratio||0.34|
|Price to book value (PB ratio)||4.62|
On October 1st, 2015, Johnson Controls, Inc. and Hitachi Appliances, Inc. (now Hitachi Global Life Solutions, Inc.) formed a joint venture to create Johnson Controls-Hitachi Air Conditioning. Hitachi Appliances divided up and gave the Joint Venture its air conditioning division. Hitachi Global Life Solutions, Inc. still holds a 40% stake in this firm, while Johnson Controls has bought a 60% stake. The most diverse product line in the air conditioning sector is now available to combined customers thanks to the collaboration of two vibrant cultures with histories dating back 100 years. The firm is the fifth-largest ac manufacturer in India.
The following table represents some of the current statistics about Johnson Controls-Hitachi Air Condition. India Ltd as of 14 Oct 2022
|Market Cap||7,911 Cr.|
|Return on Equity (ROE)||14.97 %|
|Sales Growth (3Yrs)||10.96 %|
|Current Promoter holdings||74.25 %|
|Debt to Equity Ratio||0.04|
|Price to book value (PB ratio)||11.79|
When the firm, then known as Kalyani Telecommunications and Electronics Pvt Ltd, was incorporated in 1985, it also underwent a public limited company conversion. In 1986, the company changed its name to Kalyani Sharp India. The firm began marketing the complete line of its goods under the Sharp brand name in 1995, after Sharp Corporation Japan's 1995 acquisition of the majority shareholding in the business.
Under current Japanese ownership, Sharp has 33 factories and a production base spread over 26 nations, and its goods are utilized in 133 nations. Sharp's acquisition of Kalyani Sharp has aided the company's marketing efforts in increasing its market share. The company's main businesses are the production of LED televisions and air conditioners. The Company is a Bombay Stock Exchange-listed company.
The following table represents some of the current statistics about Sharp India as of 14 Oct 2022
|Market Cap||138 Cr|
|Return on Equity (ROE)||2.69 %|
|Sales Growth (3Yrs)||2.51 %|
|Current Promoter holdings||74.25 %|
|Debt to Equity Ratio||0.04|
|Price to book value (PB ratio)||11.79|
Listed AC Stocks in India
Following are some of the top listed AC stocks that are trending in the Indian stock exchanges currently.
|Company Name||Last Traded Price||% Change|
|Blue Star Ltd||1,175.00||2.97||1,224.70||839.70||11,316.88|
|Amber Enterprises India||2,246.60||-1.40||4,023.65||2,029.80||7,569.63|
|Johnson Controls-Hitachi Air Condition||1,372.10||0.00||2,278.00||1,368.00||3,730.86|
(Data as of 14th October 2022)
Disclaimer: The securities quoted are exemplary and not recommendatory. Past performance is not indicative of future returns
Every summer, the stock prices of firms that produce air conditioners (ACs) surge as investors rush to purchase these shares in anticipation of these businesses' increased sales. In India, the penetration rate of room air conditioners is only around 4%, thus there is a ton of space for expansion for these businesses. However, sectoral investing comes with the risk of concentrated investing and market turmoil. Therefore, you must carefully analyze the trends of the market based on that sector and make an investment decision accordingly.
This is not an investment advisory. The blog is for information purposes only. Investments in the securities market are subject to market risks, read all the related documents carefully before investing. Past performance is not indicative of future returns. Please consider your specific investment requirements, risk tolerance, goal, time frame, risk and reward balance, and the cost associated with the investment before choosing a fund, or designing a portfolio that suits your needs. The performance and returns of any investment portfolio can neither be predicted nor guaranteed.
Who is the market leader in AC in India?
Currently, Voltas is leading the AC manufacturing company in India in terms of the stock market as well as market growth.
Which Indian AC brands are the best?
Some of the top AC brands in India are LG, Samsung, Blue Star, Voltas, Hitachi, Daikin, and Panasonic.
Is AC stock a good investment?
Currently due to extreme market volatility, investing in a particular industry may not be very lucrative, however, if you are a long-term investor, you can select the best AC stock in India as per market sustainability like Voltas Ltd, to earn better returns.