Daikin India becomes billion-dollar company, expect to double business in next 3 years

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The company is looking at India business as its “future treasure” and expects it to double to $2 billion (around Rs 16,350 crore) in the next three years

New Delhi: Airconditioner maker Daikin Airconditioning India expects to become a $2-billion company in the next three years, having crossed the milestone of $1 billion in FY23, said chairman and managing director Kanwaljeet Jawa.

Daikin India has a turnover of Rs 8,860 crore for the financial year ended on March 31, 2023.

The company is looking at India business as its “future treasure” and expects it to double to $2 billion (around Rs 16,350 crore) in the next three years, Jawa told PTI.

Daikin India is now the second company operating in the cooling space to cross the $1 billion-milestone after the Tata group firm Voltas, which had reported a total income of Rs 9,667 crore for FY23.

When asked about this Jawa said: “Yes, we are a billion-dollar company now. Now we have top shares in every segment which we operate — VRV, chillers and room air conditioners.”

The company, a wholly-owned subsidiary of Japan’s Daikin Industries, a leading global manufacturer of commercial and residential air conditioning systems, has so far invested Rs 2,300 crore in India.

“We are looking at India in the long term. We have expansion plans here to make India a manufacturing hub for Daikin for Middle East and Africa markets,” said Jawa.

Over Daikin India’s contribution to the parent global company, Jawa said it is still very small and still in the single digits.

“I would say India is a future treasure for Daikin. We may be small but the kind of expansion plan which we have …” he said, adding, “we are now aligning our growth strategy with our global strategy.”

Presently, Daikin India gets 70 per cent of its revenue from residential (room AC), 20 per cent from VRV (variable refrigerant volume AC systems) used for large offices, and the rest 10 per cent from commercial businesses such as projects etc.

“In last 13 years, from Rs 292 crore, we have become a Rs 8,860 crore company,” said Jawa, adding, “we see a good future for our India business. We are aiming to cross USD 2 billion in the next three years.”

Daikin India grew almost 140 per cent over the last fiscal, he added.

Jawa expects good growth in the cooling space from all segments — residential to commercial and projects business — as the penetration level is very low.

“Now India is at the explosion stage and the roadmap of the entire AC industry is quite bullish. Component manufacturing has started in India in a big way,” said Jawa.

He expects “10 times growth in the next 10 years time” for the Indian AC industry. With the current macroeconomic condition, and the growth of the industry with the help of the government, a “big growth” is expected.

Daikin is the largest investor under the government’s Production Linked Incentive (PLI) Scheme for the promotion of domestic manufacturing of air conditioners.

It is setting up its third unit in India at Sri City, Andhra Pradesh where it would manufacture air-conditioners and crucial components such as compressors.

“Before the end of this year we will start commercial production also,” he said, adding, “we will start manufacturing first compressors and then air conditioners.”

With this Daikin’s capacity for room airconditioners would increase to 2.5 units and 6 million units of compressors, he added.

Besides, Daikin India is also investing in R&D, AI & IoT and skilling through Daikin Japanese Institute of Manufacturing Excellence.

“Our growth is not in manufacturing but also in other areas of innovations,” he said.

Daikin India has three manufacturing facilities, 15 sales offices and 5 mother warehouses here.

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