Voltas campaigns: ‘Keeping India Cool Since 1954’ to move on 

Company strengthened its market leadership with close to 26 percent market share in the room air conditioners and is at number two position overall. 

Specializing in room air conditioning and cooling technology on a global scale, Voltas is a Tata Group company, incorporated in 1954 as a JV between Tata Sons and Swiss-based Volkart Brothers. Apart from room air conditioners, Voltas deals with contract revenue, commercial refrigeration products, and the sale of services. 

So far as Voltas Ltd., share price swing is concerned, it was valued at 1248 as on September 16, 2021 recently corrected from around the recent high of 1125 (June’21) to a low 955 (26th Aug’21); the previous high was 1132 made in Feb’21 after making the COVID lockdown 1.0 low 427.45 in May 2020. Thus there was a phenomenal gain of almost +165 percent in 13-months for investors. 

Diverse business portfolio 

Voltas’ segments include Electro-mechanical Projects and Services (EMPS); Engineering Products and Services (EPS); Unitary Cooling Products (UCP) for Comfort and Commercial uses. It is engaged in the field of air conditioning, refrigeration, as well as in the business of electro-mechanical projects as an EPC contractor. The Company is also engaged in the business of engineering product services for mining, water management and treatment, construction equipment, and the textile industry. Almost 75-80 percent of its revenue comes from domestic operations (India) and the Middle East contributes around 15-20%. Its projects business is divided into Domestic Projects Group (DPG) and International Operations Business Group (IOBG). 

Unitary Products business group manufactures air conditioners, air coolers, commercial refrigerators, water coolers, and water dispensers. Voltas, the largest air-conditioning brand in India, has almost 27 percent of the market share. It started manufacturing air conditioners in the 1960s under license from the Carrier Corporation. Voltas produced India’s first window AC with DC-inverter-based variable-speed motors. DC Inverter is an innovative technology that provides superior cooling while reducing the frequency of turning the compressor on and off. This helps in reducing power consumption to a greater extent. The firm is also a major producer of evaporative coolers, which are widely used for comfort cooling in arid and semi-arid climates. 

Joint ventures and international reach 

Voltas also entered into a joint venture with Turkey-based Ardutch, which is a subsidiary of Arçelik, part of the KOC Group making the Beko brand of home appliances, producing refrigerators, air conditioners, washing machines and kitchen appliances under the brand name of Voltas Beko. Voltas has executed many international projects in the Middle East including air conditioning in the world’s tallest building, the Burj Khalifa, in the once largest ocean liner, RMS Queen Mary, Palace of Sultanate of Oman, Bahrain City Centre Mall, Ferrari, World Theme Park in Abu Dhabi, Sidra Medical and Research Centre in Qatar, Villaggio Mall in Qatar and Dubai’s Mall of Emirates. 

Campaigns launched 

In line with the campaign slogan of ‘Keeping India Cool since 1954’ and being the ‘cooling experts of India,’ Voltas recently launched its Air Cooler campaign ‘Ab Garmi Ke Mazey Lo, Bina Garmi Key, targeting less affluent consumers. Voltas is also giving a thrust of digital media campaigns and sales. Voltas has also opened new exclusive shops in Tier II and III cities for higher distribution reach and market share and strengthened its leadership position in urban and semi-urban areas. 

Voltas CEO Bakshi said recently, “We, at Voltas, believe in having a holistic 360° strategy, where we focus on being accessible to our customers in multiple formats. As part of this, we have adopted an Omni-channel strategy with an emphasis on offline as well as online channels. This largely helps us customize our approach to suit the different markets in the rural, as well as urban areas, across the country. With consumers at the centre of our universe, our marketing initiatives have always included campaigns that can easily identify with consumers. We have a record of demystifying technologies and creating meaningful campaigns, which stay relevant for the consumers for years. We will continue to have the highest Share of Voice in the Cooling products category, with a heavy presence across electronic media. Further, keeping in mind the trend of consumer media consumption, over 25 percent of our Advertising spend will be on Digital.” The Cooling Products business made a good recovery. As of last quarter, it achieved a YoY growth of 46 percent over the same quarter of the previous year. 

The performance of the Air cooler vertical too was 11 percent over the previous year. Based on the latest market share figures, it is at the number two position overall. Overall, I am optimistic about double-digit industry growth this summer, said Bakshi. 

Market leadership and focus 

Voltas has strengthened its market leadership with close to 26 percent market share in the Room Air conditioners. And we are ramping up production in our existing factories in Pantnagar, Waghodia, Sanand and working towards enhancing the production capacity of ACs through another plant in the Southern region of the country. So, in the ensuing times, more traction is expected in urban and mini-metros, due to the high level of penetration of branded cooling products in these markets. 

To address this growing demand, the company has taken some key steps like shifting stocking focus to high-demand goods, penetration in more rural, less affected zones and increasing the manufacturing capacities. As the pace of electrification increases and the expected trickle-down effect on consumer durables is likely to be witnessed, given the increasing disposable incomes, demand from rural as well as Tier 2 and 3 cities will also increase.