Summer once meant sticky mango juice on your hands, fighting over the last slice of watermelon, and someone in the house shouting, “fan full speed pe chalao!” while everyone still complained. The heat was annoying, but manageable. Almost part of the routine.
Now, summers are arriving earlier. Staying longer. And getting harsher. Temperatures in several parts of India have already been reported 4°C to 8°C above normal in early March. In some regions, readings have even touched close to 40°C as early as February-end, something that was rare earlier.
Early Onset of Summer: A Structural Shift in Demand
The trend is not just about one-off spikes. Weather agencies have indicated that heatwave days between March and May could remain above seasonal averages this year. Even February has already turned out to be among the warmest on record. What used to be peak-summer conditions is now becoming the new normal much earlier in the year.
This shift is clearly reflecting in consumption patterns.
Sales of air conditioners are picking up faster than usual. Air coolers are seeing demand in smaller towns where affordability matters. Refrigerators are also becoming more essential, especially as households try to store food better during longer heat spells.
This is no longer a short seasonal spike. It is gradually turning into a structural demand trend, making the segment worth tracking.
The stocks selected here are built around this demand theme. They cover different parts of the cooling market without overlapping too much. Some capture premium urban demand, while others reflect mass adoption across regions. The focus is on companies with strong brands, wide distribution, and the ability to benefit consistently as rising temperatures keep pushing cooling demand higher year after year.
#1 Voltas: The Market Leader Scaling Up for an Early Summer
Voltas is engaged in the business of air conditioning, refrigeration, electro-mechanical projects as an EPC contractor both in domestic and international geographies (Middle East and Singapore) and engineering product services for mining, water management and treatment, construction equipment and textile industry.
Voltas reported a mixed set of numbers for the December quarter. The company continued to hold its leadership in the room air conditioner market. Total income for Q3 FY26 stood at around Rs 3,130 crore. This was flat compared to Rs 3,164 crore last year.
Net profit came in at Rs 84 crore. This was down from the Rs 131 crore reported a year ago. The decline was due to cost pressures and higher incentives.
The RAC Dominance: Leveraging a 17.9% Market Share
The room air conditioning business remained the key driver during the quarter. The company saw improved channel activity. There was also some pre-season demand. This was supported by GST changes and advance buying before regulatory transitions.
Voltas strengthened its market position. Its RAC market share rose to about 17.9% year-to-date. This is important as India heads into an early and intense summer in March 2026.
The company is preparing for this demand cycle. It has expanded its retail reach. This includes micro-level targeting and adding new channel partners. There is also a focus on regional retailers and institutional sales. Inventory levels in the channel remain under control. Management expects stocks to clear within weeks as summer demand improves.
Supply Chain Aggression: Expanding Capacity to 1.5 Million Units
On the manufacturing side, capacity is being ramped up. The Pantnagar plant is already running at full capacity. The Chennai plant is being expanded. Capacity is moving from 1 million units to about 1.5 million units. Utilisation is expected to stay high during peak summer. The company has also improved backward integration at Chennai. This should help with cost control and efficiency.
Overall, profitability remained under pressure in Q3. Costs and pricing dynamics weighed on margins. But the outlook appears better from here. Rising temperatures and early summer conditions are likely to support demand.
The company is entering the season with better preparation. This includes stronger distribution and higher capacity. This could help Voltas benefit from a stronger cooling cycle ahead.
In the past year, share price of Voltas is down 3.1%.
Voltas 1 Year Share Price Chart
#2 Blue Star: The Premium Play Reaching into Tier-2 and Tier-3 Markets
Blue Star manufacturers air purifiers, air coolers, water purifiers, cold storage and speciality products. The company offers turnkey solutions in mechanical, electrical, plumbing, (MEP) and fire-fighting projects. It is the largest after-sales service provider for air conditioning and commercial refrigeration products in the country.
Blue Star reported a muted performance in the December quarter, reflecting a weak demand environment through most of FY26. Consolidated revenue for Q3FY26 rose 4.2% year-on-year (YoY) to Rs 2,925 crore. Net profit, however, declined sharply by around 39% to Rs 80.6 crore, largely due to a one-off impact and softer operating conditions.
The quarter was marked by subdued demand across key segments. Management indicated that Q3 was a transitional phase rather than a growth period. The core air-conditioning business showed early signs of recovery. This was driven by channel restocking ahead of new energy efficiency norms and expectations of summer demand.
The “Affluent India” Proxy: High Margins in Unitary Cooling
The central theme for the business remains weather-led demand. Rising temperatures and an expected stronger summer season are seen as key growth triggers. Room air-conditioners have started seeing traction again after a weak stretch.
Demand is being driven by Tier-2 and Tier-3 markets, where penetration remains low and price-sensitive consumers dominate.
The Infrastructure Backbone: MEP Projects and Data Centre Demand
In the projects segment, revenue grew 8.6% YoY. However, order inflows were weaker during the quarter. Some large project finalisations were delayed. Demand from factories, data centres and commercial buildings remains steady. Infrastructure projects are nearing closure, which is putting pressure on margins due to cost overruns.
The unitary cooling products segment, which includes room ACs, remained flat in revenue terms. Margins improved due to cost control and lower discounting. The company consciously avoided excess inventory. This helped protect profitability in a weak demand environment.
On the expansion front, Blue Star is focusing on strengthening its distribution network and preparing for the summer season. Production of new models aligned with revised energy norms has begun. The company is also investing in supply chain resilience and localisation to reduce dependence on imports.
Global ambitions remain intact but are progressing gradually. The company is expanding its presence in the US and Europe. However, progress is constrained by trade uncertainties and weak demand in segments like heat pumps. Management indicated that exports could contribute meaningfully over the next three years as capabilities scale up.
Looking ahead, the near-term outlook hinges on the onset and intensity of summer. Pricing actions are expected due to higher input costs and regulatory changes. Demand recovery is visible but not yet strong. The company expects Q4 to be significantly better than Q3. However, sustained growth will depend on how the upcoming summer season plays out and how pricing impacts consumer demand.
In the past year, share price of Blue Star tumbled 16%.
Blue Star 1 Year Share Price Chart
#3 Havells India: The Diversified FMEG Giant Hedging Cooling with Cables
Havells India is a leading fast moving electrical goods (FMEG) company and a major power distribution equipment manufacturer with a strong global presence.
Havells India reported a steady December quarter. Revenue for Q3FY26 grew about 14% year-on-year. EBITDA rose 21%, indicating operating leverage. Net profit was impacted by an exceptional charge of around Rs 45 crore.
The Lloyd segment remains central to the company’s near-term outlook. Cooling products such as air-conditioners faced weak demand in recent quarters due to a poor summer. However, channel inventory has now started normalising. This is a key trigger as the market enters the peak summer months of March and April.
The Lloyd Turnaround: Normalizing Inventory for a Q4 Rebound
Management indicated that production planning for Lloyd is being done with caution. The company is balancing optimism with prudence after last year’s weak season. Inventory at the channel level is lower compared to earlier periods, which could support demand as the season progresses.
Pricing remains an important factor for Lloyd. The company expects a 5% to 10% price increase in air-conditioners due to higher input costs, regulatory changes, and currency movements. However, GST adjustments may partly offset the impact for consumers. Pricing and demand trends will need to be monitored as the season progresses.
Operating Leverage: How the Cables Business Funds Consumer Expansion
Beyond Lloyd, the cables and wires segment led overall growth during the quarter. Volume growth remained strong, supported by infrastructure demand and commodity price tailwinds. Other consumer categories such as heating products and water heaters also performed well due to a favourable winter.
On expansion, investments in the Lloyd business are largely complete. The company is now focusing on optimising utilisation of its existing capacity. Capex going forward will be directed more towards cables and wires and the development of a new R&D centre. Total capital expenditure of around Rs 1,000 crore is planned for the next year.
Exports in air-conditioners remain limited, with the business largely domestic-focused. While opportunities are being explored, global expansion has been slow due to external factors such as tariffs.
Overall, Havells’ near-term performance is closely tied to the upcoming summer season, with Lloyd at the centre of this narrative. A strong summer could drive volume recovery and improve operating leverage. However, the company remains cautious, with demand visibility still evolving and dependent on weather conditions.
In the past year, share price of Havells India tumbled 11.9%.
Havells India 1 Year Share Price Chart
#4 Whirlpool of India: The Efficiency-First Turnaround Story in Home Appliances
Whirlpool of India is one of the leading manufacturers and marketers of major home appliances in the country.
Whirlpool of India reported a stable performance in the December quarter, operating in what it described as a relatively weak industry environment. Revenue for Q3FY26 grew around 4% YoY. Profitability, however, suffered.
In Q3 FY26 profit dropped to Rs 27 crore from Rs 45 crore reported in a year ago period. Profit decline appears largely driven by a sharp fall in other income and continued pressure from interest and depreciation, rather than core operating weakness.
The company indicated that demand remained subdued across key categories, including refrigerators and air-conditioners. Despite this, it was able to sustain market share in a competitive industry. The focus during the quarter was clearly on improving profitability rather than chasing volume growth.
Margin Over Volume: The Shift to Negative Working Capital
Margin expansion was driven by cost control measures under its productivity programs. These efforts helped the company deliver EBITDA growth of over 30% during the quarter. This reflects a shift towards operational efficiency in a low-growth environment.
Operationally, the company continued to maintain strong discipline. Working capital remained healthy, with the business operating at negative net working capital levels. This indicates efficient cash flow management despite demand pressures.
The Global Tech Link: Tapping into Worldwide R&D Ecosystems
Whirlpool also highlighted its ongoing engagement with global operations, including services linked to its Global Technology Center. These arrangements are expected to continue over the medium term, supporting continuity and capability development.
Overall, the quarter reflects a cautious operating environment. Growth remains modest, but profitability has improved. The company appears focused on maintaining market position and strengthening margins while navigating weak demand conditions.
In the past year, share price of Whirlpool of India is down 11.2%.
Whirlpool of India 1 Year Share Price Chart
Financial Health: Comparing P/E Ratios and Margins
Let’s now turn to the valuations of the companies in focus, using the Enterprise Value to EBITDA multiple as a yardstick.
Valuations of Companies in focus
| Sr No | Company | EV/EBITDA Ratio | 5-Year Average EV/EBITDA | Industry Median | ROCE | ROE |
| 1 | Voltas | 53.3 | 44.6 | 19.1 | 17.6% | 13.5% |
| 2 | Blue Star | 40.5 | 33.8 | 19.3 | 26.2% | 20.6% |
| 3 | Havells | 33.1 | 41.4 | 14.0 | 25.3% | 18.8% |
| 4 | Whirlpool of India | 11.2 | 33.4 | 19.0 | 12.3% | 9.3% |
In terms of return ratios, Blue Star and Havells are in a better spot. Blue Star’s Return on Capital Employed (ROCE) stands at 26.2% and Return on Equity (ROE) at 20.6%. Havells is close with 25.3% ROCE and 18.8% ROE. Voltas is lower at 17.6% and 13.5%. Whirlpool is the weakest here with 12.3% ROCE and 9.3% ROE.
Valuations, however, tell a slightly different story. Voltas and Blue Star are trading much higher than both their past averages and the industry median. Voltas is at 53.3x EV/EBITDA and Blue Star at 40.5x. Havells is at 33.1x, which is lower than its own history but still above the industry. Whirlpool, at 11.2x, is the only one below both its average and the sector median.
This creates a gap. Some companies are already priced for growth, but recent performance has been weak. Others look cheaper, but also have lower return ratios. That is where the difference lies across these names.
Comparative Analysis: Valuations and Return Ratios
The trend is clearly in place. Rising temperatures are pushing demand for cooling products across categories. But at the company level, the picture is still not fully settled.
Some companies are trading at higher valuations, which means expectations are already built in. At the same time, return ratios are stronger for a few players, while others are still catching up. Despite this, stock prices across most of these names have been under pressure over the past year. That suggests the market is still waiting for a clear pickup in earnings.
As the summer season progresses, actual demand will start reflecting in numbers. This is where things will become clearer. How companies handle pricing, manage costs and convert demand into volumes will matter more than just the overall theme.
For now, the story looks promising but not fully played out. These stocks can be tracked to see how they perform as the season unfolds.
You can track how these companies progress as temperatures rise by adding stocks to your watchlist.
Disclaimer:
Note: We have relied on data from www.Screener.in throughout this article. Only in cases where the data was not available, have we used an alternate, but widely used and accepted source of information.
The purpose of this article is only to share interesting charts, data points and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educative purposes only.
Ekta Sonecha Desai has a passion for writing and a deep interest in the equity markets. Combined with an analytical approach, she likes to deep dive into the world of companies, studying their performance, and uncovering insights that bring value to her readers.
Disclosure: The writer and her dependents do not hold the stocks discussed in this article.
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