Electronics Mart Sees AC Demand Heat Up; Will Cooktop Growth Fade?

Synopsis: Electronics Mart India Limited is seeing a strong surge in AC demand, with sales rising 25% in recent weeks, supporting near-term growth. However, increased demand for cooktops and microwaves may be temporary, and long-term growth will depend on sustaining demand across product categories.

Electronics Mart India Limited is experiencing changes in the pattern of demand for various categories of products, as seasonal factors are now influencing the market significantly. The demand for air conditioners is witnessing a strong surge with the increase in summer temperatures, while small domestic items like induction cookers and microwave ovens are showing increased demand as well. 

With a market cap of Rs 3,500 crore, the shares of Electronics Mart India Ltd are trading at Rs 91 and are trading at a PE of 37.9 compared to their industry’s PE of 36.4.

AC Demand Driving Near-Term Momentum

Electronics Mart India Ltd is seeing a strong pick-up in air conditioner demand, with the company seeing a 25% increase in AC sales over the past 15 days. This is a strong indication of the seasonal pick-up in demand with the onset of summer. This comes after a relatively weak summer season in the previous year, in which the contribution of air conditioners to the company’s revenues declined to 11% from the normal 15%.

The pick-up in air conditioner demand is expected to play a major role in driving the company’s near-term performance, particularly with the company guiding for over 6% same-store sales growth in the fourth quarter. This is because the cooling products segment is a high-value segment, and a small increase in the volumes sold will have a significant impact on revenues during the peak season.

Cooktop Demand Spike May Not Be Sustainable

On the other hand, the recent increase in induction cooktop and microwave demand also reflects a more transitory trend. Although induction cooktops and microwaves have shown an uptick in demand, the base for such demand is still low. For instance, microwave demand accounts for merely 2% of the company’s top line. The company has also cautioned that the increase in demand for cooktops may not be sustained in the long term.

Overall, this reflects the trend that although the company may benefit from the demand for smaller home appliances such as induction cooktops and microwaves, such demand may not sustainable for the company. The reliance on seasonal categories such as air conditioners also reflects the volatility in demand for the company’s products.

From a broad perspective, the company’s growth trajectory will depend on its ability to balance the seasonal demand for its products with the demand for its other categories. Although the growth in demand for air conditioners provides a positive outlook for the company’s growth prospects, the company’s growth will depend on its ability to sustain the demand for its other categories as well.

Financials

The revenue from operations for the company stood at Rs 1,940 crore in Q3 FY26 compared to the Q3 FY25 revenue of Rs 1,805 crore, up by about 7.5 per cent YoY. However, the net profit stood at Rs 30 crore in Q3 FY26, down compared to the Rs 34 crore profit in Q3 FY25.

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