Amber, Dixon, Polycab, Epack, Havells, Blue Star, LG: Check fresh targets ahead of summers

Ahead of the rising heat in the summer season, a recent industry report by YES Securities reveals that demand for room air conditioners (RAC) has fallen short of expectations in the initial part of summer, with average daily RAC sales during February and the first week of March registering around 20 per cent lower compared to the prior year. This is attributed to 2025’s February and March being exceptionally hot, leading to a high base effect.

Despite the subdued demand, YES Securities notes that channel inventory for RACs is stabilising, now standing at around 45 days. This is considered to be at the upper end of the normalised range of 35-45 days ahead of peak season, as dealers and distributors focus on clearing existing stock and reducing fresh purchases.

Price hikes across brands have been selective, according to YES Securities’ findings. Most increases have only applied to new 2026 Bureau of Energy Efficiency (BEE) rated RACs, which saw price jumps of about 7-8 per cent. Older BEE-rated RACs have not faced price hikes so far, despite ongoing raw material inflation.

Brand-wise, Voltas has posted robust secondary RAC sales in February. YES Securities attributes this performance to Voltas’ competitive pricing strategy, including discounted channel filling in December, which has enabled dealers to pass on savings to end customers and potentially gain market share.

Other large appliances such as refrigerators and washing machines are experiencing value growth of 7-9 per cent, though volume growth remains a challenge, the YES Securities report highlights. The market is shifting from direct-cool refrigerators towards higher-capacity frost-free models, while premium front-load washing machines see accelerated uptake.

LG Electronics is employing cashback and financing offers through partnerships with most credit cards and non-banking financial companies (NBFCs). According to YES Securities, this gives LG an advantage over rivals with more limited tie-ups. LG has also led new product launches, including the introduction of the new 2026 BEE-rated RAC.

Industry trends noted by YES Securities include Mitsubishi Heavy Industries reducing RAC prices by 12-14 per cent following its new manufacturing base in India, which now ships domestically produced units. LG Electronics is also expected to introduce combination schemes for dealers by the end of March to encourage further inventory movement.

YES Securities’ assessment concludes that inventory normalisation is a positive sign for the RAC segment, which has faced challenges over the past three quarters. The report anticipates a demand surge from the latter part of March as temperatures rise, projecting about 15 per cent RAC growth for the summer season.

From this space, YES Securities has a ‘buy’ rating on Amber Enterprises (Target Price: Rs 8,962), Crompton Greaves (Target Price: Rs 319), Dixon Technologies (Target Price: Rs 12,514), Epack Durables (Target Price: Rs 352), IFB Industries (Target Price: Rs 1,412), LG Electronics India (Target Price: Rs 1,810), Orient Electronics (Target Price: Rs 233), Polycab India (Target Price: Rs 8,515), RR Kabel (Target Price: Rs 1,746) and Stove Kraft (Target Price: Rs 636).

It has an ‘add’ rating on Havells India (Target Price: Rs 1,659), Symphony (Target Price: Rs 1,058) and TTK Prestige (Target Price: Rs 681). The brokerage remains ‘neutral’ on Bajaj Electricals (Target Price: Rs 411) and Voltas (Target Price: Rs 1,420). YES Securities has a ‘reduce’ rating on Blue Star with a target price of Rs 1,763.