New Delhi: With the heatwave gripping north and central India, shares of air conditioner manufacturers and power utilities have surged up to 4% on Monday, April 24. This comes as the markets continue to anticipate higher demand for power and cooling systems.
The Power Play: Meeting Record Demand
The main beneficiaries of this market surge have been power generation and transmission firms where increased demand for cooling systems will force the national power grid to hit its peak demand for the summer.
NTPC and Tata Power have gained significantly due to this surge, rising 1.31% and 1.77% resopectively. Amongst transmission firms, Power Grid Corporation has gained 1% as well, even as the government scrambles to ensure that the chances of power cuts during the peak afternoon hours are minimized.
Cooling Giants: The Retail Rush
Consumer Electronics players, primarily Voltas and Blue Star, has seen their stock prices rise 3.5% and 5% respectively as rising temperatures translate into rising demand. Other players in the air-cooling market, including Havells and Symphony, have also seen increased buying interest, as consumers seek affordable alternatives for rural and semi-urban markets.
The opportunity behind the surge
According to the IMD, the heatwave conditions are expected to continue in some parts of northwest and central India for the next three days before easing. This forecast usually increases demand for room air conditioners, air coolers and refrigeration products, though this remains a temporary phenomenon.
For the rest of the economy, the heatwave can have serious economic implications, delaying construction, increasing the pressure on healthcare and rising inflation. This situation will be monitored closely, even as temperatures can reach 40°C in the plains and 30°C in the hills to qualify as a heatwave.
