Godrej Enterprises eyes a cool 50% growth in AC sales for FY26

It already feels like June, and April has yet to arrive! As temperatures rise earlier than expected, the Appliances Business of Godrej & Boyce, a division of the Godrej Enterprises Group, has introduced its latest smart air conditioners in two new television commercials. 

Last year, the air conditioning market experienced an industry-wide growth of 30-35%, with demand reaching a remarkable peak of 60% during the hottest months. Godrej Enterprises surpassed the industry, achieving an impressive 100% growth—effectively doubling its AC sales. 

As temperatures rise once more, the company has established an ambitious goal of achieving 50% growth this year, surpassing the industry projection of 20-25% made by credit rating agency ICRA.

Expanding the product portfolio with design and innovation

Godrej & Boyce has expanded its design-focused AC lineup, building on the success of its Vogue series, which draws inspiration from natural elements. The company has introduced wood finish air conditioners and launched a new marble series, available in both split and window models. 

"Last year, we didn’t have the marble series, but this time, we’ve introduced it across both split and window ACs," said Sanjeev Jain, sales head at Appliances Business of Godrej Enterprises Group.

Furthermore, the brand is expanding its consumer base by entering the commercial AC segment, launching tower and cassette ACs designed to address the cooling needs of large residential and commercial spaces.

The trend of smart air conditioners

Although smart air conditioners have existed for some time, their adoption has been gradual, with market penetration remaining at approximately 10-12%. Swati Rathi, head of marketing at Appliances Business of Godrej Enterprises Group, explains the reason succinctly: “Indian consumers are value-conscious.” They seek intelligent technology that provides real advantages, rather than mere gimmicks.

In response to this, Godrej has packed its new smart ACs with AI-powered technology, IoT connectivity, and WiFi-enabled controls to make cooling smarter and more convenient. 

Features such as the Smart Filter Reminder, which alerts users when it's time to clean their AC filters, and the Smart Scheduler, which enables users to automate cooling according to their routines, offer practical advantages that extend beyond conventional smart. Voice command integration operates seamlessly with Alexa and Google Assistant, allowing for hands-free operation.

"Some brands offer direct voice control, but language, dialects, and pronunciation differences create challenges. Alexa and Google Assistant specialise in this, making them far more reliable," Rathi explained.

Betting big on IPL and digital marketing

To drive awareness and engagement, Godrej is going all-in on a 360-degree marketing campaign, spanning news platforms, YouTube, radio, and retail activations. However, the true game-changer? Sponsorship for the IPL.

"We will have a significant presence in the IPL, both on OTT and TV. Additionally, we have strong in-store activations because the real ‘moment of truth’ happens there."

Swati Rathi, Godrej Appliances

The main target audience for the new series is individuals aged 25 to 35, as they exhibit a greater affinity for smart technology. However, the 35-45 age group holds significance, particularly as affordability tends to improve with age.

Window ACs: A shrinking market, yet still relevant

While new residential projects tend to prefer split ACs, the window AC segment continues to be important, especially for renters and homeowners facing space limitations.

"The window AC market isn’t expanding; in fact, it’s declining. But for those who need a cost-effective solution, we are offering premium features like a 5-star energy rating, four-way swing, and a touch panel interface," said Jain.

Numerous rental properties continue to feature pre-installed window AC slots, and landlords frequently prohibit modifications for split AC units. Godrej views this as a chance to provide renters with efficient and cost-effective solutions.

Entering the commercial AC market

Beyond residential cooling, Godrej is expanding its presence in the commercial AC segment, focussing on corporate offices in need of energy-efficient cooling solutions, retail environments such as malls and high-traffic commercial establishments, as well as institutional setups such as schools, hospitals, and government buildings that necessitate large-scale, customised air conditioning.

The commercial AC market represents 10% of the overall industry, with an estimated value of Rs 3,500 crore. Godrej seeks to position itself as a significant player in the market by offering tower and cassette ACs that serve both B2B and B2C segments.

Preventing supply shortages experienced last year

Last year, the demand for ACs surged to such an extent that suppliers struggled to keep pace. Rathi acknowledged, “The industry failed to foresee the extreme heatwave, resulting in stock shortages.” This year, the company is better prepared with enhanced inventory management.

The majority of Godrej’s air conditioners are produced at the Pune plant, a modern facility that upholds high production standards and energy efficiency. The new smart AC range will also be manufactured at this location. 

The plant, equipped with advanced automation and precision engineering, plays a crucial role in ensuring quality, reliability, and sustainability throughout the product lineup.