FRIGID FORTUNES
Beyond Market|November 2023
THE REFRIGERANT GASES SECTOR IS ON A RAPID GROWTH TRAJECTORY, DRIVEN BY THE SURGING DEMAND FOR AIR CONDITIONERS
FRIGID FORTUNES

As stock market investors, identifying sectors with promising growth prospects and potential profitability is essential. One such sector offering an attractive opportunity is the refrigerant gases industry.

The Indian refrigerant gases industry is poised for huge growth, primarily due to robust domestic demand. The country's rapid urbanization, coupled with an increase in disposable incomes, has led to a rising demand for air conditioning units, especially in residential spaces. This trend has created a substantial untapped opportunity, supporting the potential for long-term growth.

Furthermore, with the country's economy booming, this growth is expected to accelerate in the coming years. The combination of increasing urbanization, higher disposable incomes, and the desire for better living conditions has created a favourable environment for the refrigerant gases industry to thrive.

DOMESTIC DEMAND DRIVERS

Growing Urbanization

India is currently experiencing rapid urbanization, marked by a significant increase in its urban population. According to the United Nations, India is projected to add 416 million urban dwellers by 2050. This ongoing trend of urbanization has resulted in a substantial demand for air conditioning units, consequently driving the need for refrigerant gases.

Globally, there are approximately 160 crore installed air conditioners. In contract, India has only about 9 million to 10 million installed AC units, which accounts for a mere 6% of the total worldwide. When we compare India to other advanced nations, it becomes evident that the country has very low AC penetration, hovering at around 5% to 6%. On the other hand, countries like Japan have reached a penetration rate of 91%, the US at 90%, and China at 60%.

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