Synopsis

Voltas, India's leading air-conditioner maker, is set to expand its global footprint by exporting to Europe and the Middle East, leveraging its existing manufacturing capacity. Chairman Noel Tata announced his departure from the board, citing retirement age. The company is also reviewing in-house compressor manufacturing after a previous joint venture faced regulatory hurdles.

Tata said Voltas is currently operating at around 80% capacity utilisation.

Kolkata: India's largest air-conditioner maker, Tata Group-owned Voltas Ltd, is gearing up to start exports to tap growing demand in Europe and the Middle East, the company's non-executive chairman Noel Tata said on Tuesday. Tata further said he will step down from the board.

Addressing shareholders at Voltas' 72nd annual general meeting, held virtually, Tata said the company has asked the management to "pay serious attention" to exports, an area where its presence remains limited.

“There are big opportunities in Europe and the Middle East. We have the manufacturing capacities which can be used for exports," he said.

Tata said Voltas is currently operating at around 80% capacity utilisation and would prefer to use the available capacity for exports rather than contract manufacturing.

Also read | Noel Tata announces exit as Voltas chairman at company's AGM

The comments come on a day ET reported that Indian air-conditioner makers, including Godrej Enterprises Group and Havells India, are preparing to enter the European market. Exports, however, are expected to begin only next year as manufacturers need to comply with the region's stringent energy-efficiency standards, CE certification requirements and product localisation norms.

Tata also announced that Tuesday's AGM was his last as chairman of Voltas. He had made a similar announcement at Tata Group retailer Trent's AGM last week. Under the Tata Group's governance policy, the retirement age for non-executive directors is 70 which Tata will attain in November.

He said the company has built a strong pipeline of next-generation leadership through internal talent development as well as lateral hiring.

Voltas has also not shelved its plans to manufacture air-conditioner compressors after its proposed joint venture with China's Highly Group, announced in 2023, failed to secure mandatory approval under Press Note 3. The rules require prior government approval for foreign direct investment from entities based in countries sharing a land border with India, including China.

Also read | Slumdogs no more: Can tycoons take Mumbai Model to other cities?

"At present we don't manufacture compressors, but it is being reviewed by management, who may take a call in the near future," Tata said. He added that Voltas plans to invest about Rs 200 crore in capital expenditure during the current financial year, with most of the capex for its Chennai air-conditioner manufacturing facility already completed.

Tata said the company expects both volume growth and margin expansion in the April-June quarter, aided by robust demand during the peak summer season. At the same time, he cautioned that elevated raw material costs, intensifying competition from domestic and global players, and constraints in power and grid infrastructure continue to pose challenges.

In its commercial air-conditioning business, Voltas is targeting opportunities arising from the expansion of data centres, semiconductor manufacturing facilities and sustainable buildings.