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ICRA in its latest report has said that the Indian room air-conditioner (RAC) industry is poised for unprecedented growth, with year-on-year sales volumes expected to grow by 20-25 per cent to reach record highs of 12-12.5 million units in the financial year 2024-25 (FY25). It said the sales are expected to grow by 10-12 per cent in the 2025-26 fiscal.

It stated factors such as rising temperatures, increasing demand for multiple RAC units per household, growing urbanisation, higher disposable incomes and favourable consumer financing options are expected to drive this growth over the next few years.

Srikumar Krishnamurthy, senior vice president and co-group head, Corporate Ratings, ICRA, said the domestic RAC industry surpassed the pre-COVID peak levels in sales volumes in financial year 2023-2024, aided by changing climatic conditions and favourable consumer trends. He said that the number of average heatwave days per year has been steadily increasing over the last three decades. The recently concluded summer season saw robust year-on-year volume growth of 40-50 per cent for most original equipment manufacturers (OEMs).