Voltas likely to increase prices of air-conditioners in April

Tata Group's consumer durables firm, Voltas, plans to increase prices of its air-conditioners by another three per cent in April, the second this year, to offset the rise in metal prices it consumes, a top company official said on Thursday.

The company had in January last increased prices of its air- conditioners by 5-7%, thus passing on the burden of increased input costs to customers.

"We might hike prices by another three per cent in April as commodity prices have gone up. We have implemented a price hike in January this year. We will continue to hike prices if raw material costs go up further," Voltas' chief operating officer, Pradeep Bakshi, told PTI here.

Voltas, one of the leading players in the highly competitive AC segment, sells window and split ACs at a minimum of Rs12,000 and Rs15,990 (.75 tonne), respectively. A two tonne AC in both the categories will cost around Rs24,990 and Rs34,990, respectively.

"Prices of raw materials such as copper, aluminium and steel, has gone up drastically, thus affecting both our margins and customers. Hence, we have already started using alternatives for the same," Bakshi said.

However, he would not say by how much the rising costs have affected the company's overall margins.

On its sales growth this summer, Bakshi said that the company was quite bullish about the AC market as  emperatures have already started soaring.

"We are expecting a 65% growth in topline and a sale of 8,00,000 units this year. Last year, our revenue from ACs was about Rs1,331-crore, while the industry is pegged at Rs6,000-crore. We expect to maintain the growth in the coming fiscal as well," Bakshi added.

He further said that the company plans to invest around Rs65-crore to ramp-up its production capacity to about 8-lakh units in fiscal year 2012 from the current six-lakh units in both its facilities at Pantnagar in Uttarakhand.

The company, which introduced 70 new models of air-conditioners for this summer season, is betting on the newly-launched 5-star rated products to push its sales during the year.