Mukundan Menon, MD Voltas, says that the company’s Rs 600 crore-plus investment across plants will drive capacity expansion and localisation
Backed by expectations of a longer and hotter season, alongside a sharper focus on distribution, product segmentation and localisation, Voltas, a major air conditioner brand from the House of Tata, is gearing up to outpace industry growth this summer. In an interaction with BW Retail World, Mukundan Menon, Managing Director, Voltas, said the company is targeting over 20 per cent growth, while continuing to invest in domestic manufacturing.
This includes Rs 521 crore in its Chennai facility and an additional Rs 100 crore towards expanding commercial AC capacity and testing infrastructure in Waghodia to strengthen its market position. While online contributes about 10 per cent of sales, the MD noted that the company continues to expand its reach across tier 1 to 5 markets, leveraging its extensive retail presence, even as it focuses on differentiation beyond pricing to sustain long-term growth.
The company is also sharpening its product play to tap evolving consumer demand, with a strong push towards premiumisation and smart features. Menon highlighted that Voltas’ new AI-enabled Vertis split AC range is designed to go beyond conventional cooling by adapting to usage patterns, temperature and humidity levels, while optimising energy consumption. Excerpts from the conversation:
After a relatively muted summer last year, what early signals are you seeing for demand this season, and how is Voltas preparing for it? What business goals have you set for this summer?
The summer of 2024 was a super summer where the industry grew by a whopping 35 per cent or so. 2025 was a summer when there were very pre-monsoon rains throughout the season, the temperatures never rose above 35 to 36 degrees Celsius in most parts of the country. Short window of summer, the industry de-grew by around 25 percent.
On that lower figure of 25 per cent base, we feel that this coming summer, in terms of the forecast which is coming from the IMD, will be a normal, a little longer and hotter summer. If this is the case, the industry will grow by roughly around 20 per cent and we will also grow by upwards of 20 per cent. Our aspiration is to gain market share, so if the industry is growing by 15 per cent, we will grow by roughly 20 per cent.
New energy norms, rising copper costs are pushing up costs. How do you balance price increases with staying a value-for-money brand?
What we are doing is we have sort of segmented entire Indian consumers. There are the value seekers, who are first time buyers who want a good product which cools and with a brand like Tata’s, they feel comfortable buying that product. We will have products at that entry level price points. We will also have products for the feature seeker, who wants more features like AI or in terms of some more, a four-way swing.
There is another third community which is looking for performance, the performance seekers, that is places where the temperatures go very high, such as 50 to 55 degrees Celsius. They want cooling even in the highest temperature, they are not much bothered about AI and all that. We have products for different categories, we have a Vectra for the entry level, we have got Vertis for the featured level, AI driven and we have Venus for the performance. We cater to all customers, whatever their need and budget is, we have a product.
How much are you investing in domestic manufacturing and localisation as part of the Make-in-India push?
Over the last two or three years, we have invested a big amount of money, we have invested roughly Rs 521 crore in our Chennai plant, which is a plant which has got a current capacity of 1.5 million units, we have already done that investment. There will be some small additional investment which we will have to make to take it to two million units, so that is one big investment which is already done.
The second one is that the commercial air conditioning products, which is to do with chillers, VRF and ducted air conditioners, we have a plant in Waghodia. We are expanding that capacity there, we are also adding new test labs, because we are going to manufacture something called centrifugal chillers, which was always an imported product. Now we are going to manufacture in India with a technical license agreement with an MNC and we are going to manufacture in India. This is available from 300 tonne right up to 2,500 tonne. These are used for hotels, hospitals, airports, metros, large data centres and so on and so forth.
For that we are doing a fair amount of investment of roughly around Rs 100 crore, in terms of manufacturing capacity expansion. This is within one year (FY27). These are products which you have to test it before you ship it out to the customer. This testing lab itself is a big investment, because we are putting India’s largest chiller testing lab of 2,500 tonne. We are putting up in Waghodia, which will ensure we have a higher market share.
With nearly 85 per cent of AC buyers expected to be first-time customers, as per a report, how are you adapting products and pricing for this new consumer segment?
That is the entry-level products which is known as the Vectra series, which is mainly for catering to that segment. It is a good product which cools, looks also very decent. Some of them are beautiful designs also, we have got a product with the golf ball design and that is our entry-level product. As it goes up it becomes better and better. What we believe is within that price bracket, whatever best can be given, we have given it.
Voltas has one of the largest retail networks in the category. How aggressively will you expand distribution, especially in non-metros and how big is the online business currently?
I will answer the second one first, the online is roughly around 10 per cent of the overall sale, which is essentially from ecommerce, which is Flipkart and Amazon put together. In terms of the metro, non-metro thing, our reach currently is across tier 1, 2, 3, 4 and 5. In terms of the reach into smaller towns also, Voltas stores are there. We can tap into that, so we are able to reach every nook and corner of the country actually.
Competition from brands like Blue Star, Daikin Industries and LG Electronics has intensified. Do do you believe the competition is headed towards pricing, tech or distribution in the market?
It is a combination of two things, the distribution being the primary thing, it is very important to have a reach. The price as a lever alone, I think, may not be a great idea, because while you have to give a value for money and for the value seeker, you must have other things. You cannot have a business which has no moat around it. The moat around it is essentially if you have only price as your lever that may not work in the long run.
You should have a differentiation, either you create a service network like Voltas, which is the best service network in the country, now that is something that a customer buys with peace of mind that anything happens, we are there to take care of it, or the distribution reach is very important, or a product which is very unique and differentiated.
You have to do all of it together, so that the customer gets the best product, a good price, through a good channel network close to you, with a service franchisees who are able to cater to your needs whenever you need some service. There is no single magic pill or magic bullet, you have to work on every single element and when all of them come together and we are also blessed with the Tata brand on top, that is where the thing happens.
