Voltas is betting on low appliance penetration and a consumption surge as India’s per capita GDP nears $3,000
India’s AC market could double to 30 million units by 2030 at 15% CAGR
Exports remain under 1% globally, with India facing a 15% cost gap versus China
Long known primarily as an air-conditioner company, Voltas is positioning itself as a full-stack home-appliances player, with a portfolio that now spans AI-enabled air conditioners, refrigerators, washing machines, air coolers, fans, and water heaters.
The company operates across three key segments. Segment A houses its core cooling business of air conditioners, air coolers, refrigerator and commercial air-conditioning solutions, with air conditioners contributing 60% of revenues. The home appliances business runs through the Voltas Beko joint venture. Segment B focuses on domestic and international projects, delivering mechanical, electrical and plumbing solutions for large infrastructure developments. Segment C includes mining and construction equipment services as well as textile machinery.
3 February 2026
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With overall revenues of around ₹15,000 crore in FY25 and localisation levels at approximately 70%, expected to rise further, Voltas is looking to strengthen both its manufacturing depth and its presence across India’s expanding consumer durables market, says Mukundan Menon, Managing Director, in an interview with Outlook Business.
Edited Excerpts:
What is Voltas’ current market share currently? What are your market share projections for air conditioner this year and the years ahead?
In air conditioners, we are the leader with roughly 18% market share. In refrigerators, we are around 6%, and in washing machines around 8%. That gives us strong room to grow since we are still in single digits.
We are among the fastest-growing appliance brands, partly because of a low base and partly because the Tata brand resonates strongly.
We aim to reach around 20% market share in ACs, targeting about 1% growth annually till 2030.
Is Voltas late in expanding into home appliances? How do you plan to capture market?
We believe penetration levels in India are still low across categories. Air conditioners are at less than 10% penetration. Other home appliance categories range between 25% and 40%. So there is significant headroom for growth.
India’s per capita GDP is approaching $3,000. Historically, once countries cross this level, the next decade sees strong growth in consumption. People begin buying more appliances and consumer goods. Growth becomes sharper. India appears to be at that stage now, and we want to be present across that consumption growth in the home appliances space.
How is India placed in the consumer durables market globally?
India's market share is less than 1% in this sector globally. All industry people are working with the government and seeing whether how do we become a country which can also not only cater to the Indian market but also become a global exporter like China did 20 years ago...So, we are working with the government and we are seeing how it can be worked out.
China accounts for about 60%, and Thailand around 14–16%. India’s focus remains domestic for now. India faces a cost disadvantage of roughly 15% compared to China, and bridging this gap is necessary for export competitiveness.
If a global buyer asks for quotations from an Indian brand and a Chinese brand for air conditioners, the Chinese product would typically be about 15% cheaper. Bridging this gap is essential, and that is what the industry is working on in collaboration with the government.
What has changed in consumer behaviour over the last decade?
The market has changed significantly. Window air conditioners used to be popular but now account for less than 8% of sales. Consumers prefer split ACs because they are quieter and more efficient. Inverter technology has replaced fixed-speed compressors. Inverter compressors adjust speed based on cooling load, resulting in smoother operation and better energy efficiency.
Energy consumption has reduced significantly. Compared to 10 years ago, a similar star-rated AC today consumes almost half the electricity. Consumers are also demanding more features such as better air filtration, swing options, mobile app control and AI-based automation. We recently launched an AI-powered AC that optimises settings automatically.
Why didn’t sales pick up after the GST reduction?
The GST reduction from 28% to 18% was announced in September, close to winter, which is not peak AC season. The real impact will be visible during summer. While the GST cut reduced prices by about 7.8%, rising copper prices, dollar fluctuations and the upgraded Bureau of Energy Efficiency standard changes offset much of that benefit.
Copper prices increased from around $8,500 per tonne to $12,000–13,000 per tonne, significantly impacting production costs. Overall, AC prices would rise between 5% and 15% and the effects would be seen in the new products in the market.
How do you see consumer durable margins and industry recover?
Revenue should improve because the base was low last year. Margins should also improve if the demand-supply imbalance narrows and the summer is normal. Whether margins will return to FY25 EBIT levels is uncertain, but the direction should be positive. Industry-wide recovery is harder to predict because some brands are still operating at losses. However, it is unlikely to be worse than last year.
What is your distribution mix? How do you see e-commerce growing?
Traditional distribution contributes around 30–35%. Modern trade contributes about 15–16%. Regional retailers account for around 17%. E-commerce contributes roughly 10%, and exclusive brand outlets about 15%.
During COVID, e-commerce share rose to 17% because offline stores were closed. Currently, it is steady between 8–12%. Air conditioners require installation and service support, so consumers often prefer some offline interaction.
Any capacity expansion plans?
We have adequate capacity for the next 2–3 years. Smaller expansions of ₹50–100 crore will continue annually. Current capacity is about 1.5 million units. An investment of around ₹75 crore can scale it up to 2 million units.
How do you see the AC market by 2030?
India currently sells around 15 million AC units annually, with less than 10% penetration. We expect roughly 15% CAGR over the next five years, which could take the market to around 30 million units by 2030.
