Now Reading: Voltas forms joint venture with Atomberg for AC compressors
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Voltas forms joint venture with Atomberg for AC compressors
Voltas has entered a 50:50 joint venture with Atomberg Innovation to manufacture high-efficiency room air conditioner compressors, targeting an initial capacity of 2.8 million units. The company's RAC volumes grew 45 per…
Voltas has entered a 50:50 joint venture with Atomberg Innovation to manufacture high-efficiency room air conditioner compressors, targeting an initial capacity of 2.8 million units. The company's RAC volumes grew 45 per cent year-on-year, pushing its market share to 17.3 per cent year-to-date for FY27. Despite this, operating profit margin remains low at 5.7 per cent, leading analysts to downgrade earnings estimates.
The new compressor platform will cater to 3-star and 5-star RACs, focusing on the 1.5-ton segment, with commercial production expected within 18 months. Voltas passed on most of the 10-12 per cent increase in RAC costs to the market, driven by BEE rating changes, commodity inflation, and rupee depreciation. The joint venture aims to strengthen localisation and supply-chain resilience.
Indian Opinion Analysis
Voltas' compressor joint venture is a bid to reduce dependence on imports, which are currently allowed up to 30 per cent of FY25 volumes under regulations. The company's 5.7 per cent operating margin remains thin for a consumer durables player, even after a 120 bps improvement. Its Voltbek washing machine and refrigerator joint venture is yet to reach Ebitda breakeven. The market will watch whether the new JV can deliver margin gains without requiring heavy capex, as total investment details are still being finalised.
Source: rediff.com
This brief was synthesised by AI from the source linked above.
