My Best Pick 2016

Rajat Rajgarhia

Rajat Rajgarhia of Motilal Oswal on why he increasingly thinks Voltas is a cool stock to own

Soumik Kar

Selling air conditioners (ACs) is not exactly a cool job, but Pradeep Bakshi has worked remarkably hard to ensure that Voltas maintains its leadership position in the domestic aircon market after making it to the top in FY13 (May 2012, to be precise). In 2006, Voltas, which had by then sold off its refrigerator and washing businesses, was faced with the prospect of shutting down its AC division, which was then clocking sales of ₹500 crore and incurring an operating loss of ₹34 lakh. The Koreans, Japanese and Americans had entered the domestic market and edged Voltas out from the Top 5 ranking. The adverse turn of events saw the management give Bakshi the task of turning around the business or selling it off. Bakshi, of course, chose the more challenging option.

Once Bakshi took over, Voltas went in for an overhaul of its marketing, distribution and product innovation strategies. With a number of MNC players already present in a much commoditised market, Voltas positioned itself as an India-centric brand and ran a successful campaign called ‘India ka dil, India ka AC’. The other change was that the company, which was earlier selling only through sales/service dealers, made products available off-the-shelf at retailers. Realising that Indian consumers are extremely conscious of rising power bills, Voltas launched the energy-efficient AC in 2007 with the campaign ‘Save karo India’, three years before the government made energy rating mandatory. This was followed by the ‘Sensible cooling’ campaign in 2010 and the launch of the ‘All-weather AC’ in 2012.

The net effect: by mid 2012, Voltas was back on top and has since maintained its hold. From 14% market share in 2006, Voltas today is the market leader with a 21% share

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