Almost 3 years back, I had a simple investment thesis to buy Voltas.
Summers in India are getting hotter everyday, we live in a tropical country and if I looked at my own house we have moved from 1 to 3 ACs in less than 3 years.
That's it.
That was my only thesis to buy Voltas.
Cut to today, while doing deep extensive research on this space, some interesting insights are corroborating this simple thesis.
90% of ACs sold in India are Split ACs.
90%!
AC penetration levels in India are still in the range of 5-7%.
India is a tropical country and summers keep getting warmer as we move to higher population levels, industrialization etc.
As per capita income rises, people aim at making their lives better - bulk of the consumption basket still goes to consuming better FMCG products on the Opex side.
On the Capex side, a house is still the biggest asset on the balance sheet. White goods follow suit in finding their place in various parts of the house.
While there are multiple players in this space, market expansion always makes room for growth for everyone.
The other demographic factor at play here is the fact that there is no winter heating demand in India - which makes the case compelling for ACs around the year.
Add to this, the PLI incentives.
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