RAC Industry Rides Seasonal Tailwinds

The RAC segment is set for a strong Q1FY27, with April–May heatwaves boosting sales. Centrum Broking’s dealer checks show RAC volumes up ~40% YoY, outperforming other white goods (10–25% growth). Seasonal Tailwinds: The delayed southwest monsoon due to El Niño has extended high temperatures, supporting near-term demand. Voltas reported crossing 1 million units in FY27 faster than ever, aided by robust marketing. Industry Context: India’s RAC industry peaked at 12.5–13 million units in FY25 (+20–25% YoY) on intense summer demand. FY26 was weaker due to unseasonal rains, high inventory, and pre-stocking ahead of BEE efficiency norm changes. Pricing & Margins: BEE star-rating revisions in Jan ’26 prompted price hikes of 5–12% (₹2,000–5,000/unit). $LGEINDIA , Samsung, and Daikin raised prices by 10–11%, while $BLUESTARCO and $VOLTAS hiked 6–8%. However, commodity inflation (copper, aluminium, plastics, freight) has lifted costs by ~13%, limiting margin cushion. Structural Drivers: Despite being discretionary, RAC demand benefits from low penetration and premiumization trends. Mid- and premium segments show stronger traction, while entry-level demand remains subdued amid high retail inflation. Inventory & Market Trends: Q1FY27 saw inventory normalization as old stock was liquidated during peak summer. Analysts caution that performance will hinge on regional heat intensity, product mix, and execution quality, rather than a broad-based upcycle. Stock performance diverges: Voltas, Blue Star, and Whirlpool are down 7–10% YTD, while LG India is up 2.3% due to portfolio diversification.