As temperatures rise, so do the shares of India’s leading air conditioning companies. On Wednesday, Voltas‘ stock surged 4.21% to ₹1,530.00, while Blue Star’s shares climbed 3.11% to ₹2,225.00 on the BSE. This uptick follows the government’s decision to exempt essential AC components—specifically, grooved copper tubes and compressors of 2 tonnes and above—from mandatory BIS certification, potentially easing supply chain constraints and fostering industry growth. ​

The Indian Room Air Conditioner (RAC) market is experiencing robust expansion, propelled by low penetration levels, increased affordability, and escalating temperatures. Analysts anticipate a 20-25% growth in AC sales for Q4FY25E, even as other consumer durable sectors face slowdowns. ​

Blue Star: Strategic Expansion and Market Penetration

Blue Star has been steadily increasing its market share by emphasizing in-house manufacturing, research and development, and targeted marketing strategies to penetrate Tier 2, 3, and 4 markets. The company has also bolstered its presence in South and East India, regions with substantial growth potential.

Financially, Blue Star reported a consolidated net profit of ₹96.06 crore for the third quarter ending December 2024, reflecting its strong performance.

Voltas: Navigating Challenges with a Long-Term Vision

Voltas is currently addressing near-term challenges due to leadership changes and operational shifts. The company’s long-term strategy involves transitioning from a trading model to manufacturing, a move that could enhance its competitive position over time. However, this transformation may take 8-10 quarters to stabilize its market position and share.

Despite these challenges, Voltas remains a dominant player, with a higher price-to-earnings (P/E) ratio and a notable dividend payout ratio, making it an attractive option for long-term investors. ​

Technical Analysis: Bullish Trends for Both Stocks

Blue Star’s stock has been on a strong uptrend, consistently making higher highs and higher lows, indicating sustained buying interest. The shares have decisively moved above key short-term and medium-term Exponential Moving Averages (EMAs), reinforcing positive sentiment. A breakout above the recent high could lead to further gains, with the next resistance zone between ₹2,400 and ₹2,600. Immediate support is at ₹2,100, with stronger support at ₹2,060.

Voltas’ stock has recently broken above key resistance levels, supported by increasing volumes and a bullish crossover of the 20, 50, 100, and 200-day EMAs. This technical setup suggests strong upward momentum, with potential targets in the ₹1,600 – ₹1,700 range. Immediate support is at ₹1,440, with stronger support at ₹1,400. ​

Investment Considerations: Growth vs. Stability

For momentum investors, Blue Star’s robust performance and strategic initiatives make it a compelling choice. In contrast, Voltas’ recent technical breakout and long-term manufacturing strategy offer potential for those seeking stability and dividend income. As demand for air conditioners surges with rising temperatures, investors should align their choices with their risk tolerance and investment horizons. While Blue Star presents near-term growth opportunities, Voltas may appeal to those looking for long-term value as it restructures its business model. ​