Voltas, Blue Star, LG Electronics India shares in focus; here is why

This hike, which will be applicable from January 1, 2026, will almost offset the price advantage which the consumers have got from the GST reforms in September this year on room air conditioners (RAC), where duty was slashed 10%, PTI reported.

Apart from this, the fall of the Indian rupee against the US dollar and the global increase in copper prices are also putting pressure on manufacturers' margins.

Despite this, according to the PTI report, leading manufacturers such as Voltas, Daikin, Blue Star, and Godrej Appliances are unfazed and expect this to help to keep the carbon footprints lower.

The new 5-star AC under the new revised BEE norms is 10% more energy efficient; however, it will also increase the prices by around 10%, said Blue Star Managing Director B. Thiagarajan.

"New 5-star is a new product itself, which, in today's context, will be equivalent to 6- or 7-star. That new product, which will be introduced, has a price difference of around 10 per cent," Thiagarajan said.

After January 1, 2026, a 5-star of 2025 will be downgraded to a 4-star. Similarly, a current 4-star will be a 3-star, and a current 3-star will be two 2-stars, with a price difference of 5%.

What companies' management says

Expressing a similar opinion, Godrej Enterprises Group Business Head & EVP at Appliances Business Kamal Nandi said the durables industry is getting affected by currency depreciation as well as adverse commodity costs and scheduled energy regime changeover from January, which cumulatively will lead to a significant cost increase in cooling categories, with RACs being most impacted.

"In the immediate context, energy regime changeover-linked price hikes to the tune of 5-7% for ACs and 3-5% for refrigerators look likely," said Nandi.

Voltas Senior Business Leader Jayant Balan said India's cooling industry is entering a transformative phase with the upcoming BEE star rating revision effective January 2026.

"These policy shifts are accelerating demand, as trade partners and consumers move early to secure current pricing and mitigate the average expected increase of 7-8% on new inventory, noting that actual changes may differ based on specifications and product categories," he said.

Balan added that consumer behaviour is evolving rapidly in this environment.

Daikin Airconditioning India Chairman and Managing Director Kanwaljeet Jawa said that from 2012 to 2024, this is the fifth time that energy labelling standards are going up.

"This industry has been supportive of the government for energy efficiency, which is a big challenge for the country. So, ever since they have taken this into sunrise, we all have been very supportive of these movements," Kanwaljeet Jawa said.

GST benefits

The AC industry got GST benefits and had also seen an increase in sales. However, the industry is also committed towards sustainability, as when the demand goes up, it is also required to balance the energy efficiency.

"Prices will definitely go up, not only because the BEE labelling standards are going up, but copper also has gone up, the raw material cost has been going up, and the dollar against the rupee has depreciated," Kanwaljeet Jawa said.

Asked whether the RAC prices will return to the pre-GST reforms time, Jawa said, "It will be around that."

Other rules by BEE

BEE has also made star labelling mandatory on a host of appliances, including televisions, LPG gas stoves, cooling towers, and chillers, from January 1. This will help customers make an informed choice and ensure standardisation.

It has made energy efficiency norms for air conditioners stricter, with new requirements to achieve the highest 5-star rating. To meet the new norms, manufacturers are using more expensive components to meet the higher standards, leading to a price increase.

This also means 5-star-rated RACs in 2025 are now rated lower as 4-star under the new system.