NewsIndia

The significant rise in AC prices in India is driven by unprecedented increases in raw material costs and new energy efficiency regulations set to take effect in 2026. Input costs for AC manufacturers have risen by 14% to 16%, marking the highest increase since 2011.

This surge is linked to the rising prices of copper, aluminum, and steel. New energy efficiency standards will require manufacturers like Voltas to produce more complex and efficient units, further increasing production costs.

Key facts:

• AC prices are expected to continue rising due to increasing raw material costs.
• The pressure on prices is likely to persist for the next 12 to 18 months.
• Consumer electronics companies are adjusting their prices as a response to rising costs.

Veer S. Advani, MD of Blue Star Ltd., stated, “AC manufacturers are feeling the pressure of rising input costs and new energy efficiency regulations.” This situation is concerning for consumer electronics manufacturers, including Voltas.

If prices rise excessively or economic uncertainty increases, demand may decrease. The sector has experienced lower profit margins during previous commodity price spikes, such as in 2011.

Analysts remain optimistic about Blue Star Ltd. in the long term. However, they foresee challenges in the short term due to escalating costs and stock valuation issues. Companies are exploring cost-saving methods to mitigate these impacts.

The new energy efficiency regulations will be implemented starting January 1, 2026, adding urgency for manufacturers to adapt quickly.