Consumer Durables Update : RAC Channel Check (Jun’26) by PL Capital
Quick Pointers
* RAC demand softened in May-Jun’26 after a healthy post 15th Apr’26–early May’26 period
* Industry undertook 5-12% price hikes driven by BEE revisions and commodity inflation
We interacted with 31 dealers across states to assess demand momentum, pricing trends, the impact of recent BEE revisions, and brand-level feedback in the RAC segment, particularly in the context of ongoing summer season and expectations of incremental demand. Our interactions suggest demand remained healthy through post 15th Apr’26 and early May’26, but softened toward the end of May due to expected onset of monsoon. Most brands implemented price hikes to offset higher input costs and BEE-related efficiency upgrades. Inventory has moderated to healthy levels, with dealers maintaining cautious stocking ahead of the monsoon season.
RAC Demand Remains Soft; BEE Transition Impact Limited
Demand for RACs has been subdued across most regions, with channel check indicating a weaker-than-expected summer season. Demand was moderately impacted by unseasonal rains in a few regions, lower temperatures, and weak consumer spending.
BEE rating revisions had a limited impact on overall demand, although some dealers observed a shift in consumer preference from 5- to 3-star models due to higher pricing and affordability considerations.
Demand witnessed a temporary uptick during post 15th Apr’26 to early May’26, driven by peak summer conditions and inventory liquidation, before moderating in subsequent months due to unseasonal rains and lower temperatures.
Commodity Inflation Drives High Price Hikes Across Country
Pricing across the industry increased by 5-12% (INR2,000-5,000 per unit depending on model and brand) during Mar-Apr'26, driven by BEE rating revisions and higher input costs.
Some dealers observed a shift in preference toward 3-star models from 5-star ones due to affordability considerations following the price increase.
Dealers indicated that LG, Samsung and Daikin implemented relatively higher price hikes of 10-11%, while Blue Star and Voltas undertook comparatively lower increases of 6-8% on average.
Limited Inventory Build-Up
Inventory levels have largely normalized across markets following the liquidation of older stock and stronger sales during peak summer. Most dealers maintained comfortable inventory levels of 20-30 days, with limited fresh stocking and a cautious approach toward inventory build-up ahead of the monsoon season.
Other Highlights
Channel checks indicate that demand for Daikin and Blue Star remains healthy, with both brands continuing to gain traction and increase market preference.
Voltas continues to witness healthy volume growth and is steadily strengthening its market presence across key markets.
1.5T 3-star models remained the bestsellers across brands, with a noticeable increase in demand for 1.5T 5-star models.
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