Voltas vs Blue Star: Which AC stock to buy for cool returns this summer?

Voltas vs Blue Star: Air conditioner (AC) stocks are heating up, with shares of Voltas and Blue Star witnessing a strong rally. On Wednesday, Voltas’ share price jumped 4.21% to ₹1,530.00, while Blue Star gained 3.11% to ₹2,225.00 on the BSE, following reports that the government has exempted key AC components from mandatory BIS certification.

According to media reports, the government has exempted key components — grooved copper tubes and air conditioning compressors of 2 tonnes and above — from mandatory BIS certification. This move is expected to ease supply chain constraints and support industry growth.

But between Voltas and Blue Star shares, which is the better AC stock to buy this summer? Let’s compare their fundamentals, technical outlook, and expert insights.

Industry Outlook

The Indian Room Air Conditioner (RAC) market is witnessing strong growth, driven by low penetration levels, rising affordability, and increasing temperatures. According to analysts, the 2025 summer season could see AC sales growing by 20-25% in Q4FY25E, even as other consumer durable categories face a slowdown.

Chirag Jain, Senior Research Analyst at Emkay Global Financial Services Ltd., highlights the strong industry tailwinds.

“Despite last year’s high base, the 2025 summer season looks promising, with projected growth of 20-25% in Q4FY25E, even as other consumer durable categories experience a slowdown,,” Jain said.

With demand rising, investors are closely watching Voltas and Blue Star, two of the most prominent players in the sector.

Voltas vs. Blue Star: A Stock Comparison

Fundamental Analysis

Blue Star has consistently expanded its market share by focusing on in-house manufacturing, R&D, and marketing strategies to penetrate Tier 2, 3, and 4 markets. The company has also strengthened its presence in South and East India, regions with significant growth potential.

According to Chirag Jain, the company’s structural initiatives have positioned it well for sustained growth

“Blue Star has been a stable performer, benefiting from various structural initiatives undertaken over the past few years around in-house manufacturing, sustained R&D, and marketing spends with deeper penetration in weaker/potential geographies,” Jain said.

Voltas, on the other hand, is navigating near-term challenges due to leadership changes and operational shifts.

“Its long-term strategy focuses on transitioning from a trading model to manufacturing, a move that could potentially strengthen its competitive position in the long run; however, it could take another 8-10 quarters for Voltas to stabilize its market position / share,” Jain added.

Despite these challenges, Voltas remains a dominant player, and its dividend payout ratio and brand recognition make it a compelling choice for long-term investors.

Mandar Bhojane, Equity Research Analyst, Choice Broking, said that Blue Star has stronger revenue growth (25.3% YoY), while Voltas has a higher P/E and dividend payout.

Technical Analysis: What Do the Charts Say?

Blue Star share price has been riding a strong uptrend, with its stock price maintaining higher highs and higher lows, signaling consistent buying interest. On the other hand, Voltas shares have recently broken out above key resistance levels, signaling bullish momentum.

“Blue Star shares have decisively moved above key short-term and medium-term EMAs (Exponential Moving Average), reinforcing positive sentiment, with the 20-day and 50-day EMAs acting as dynamic support. A breakout above the recent high could trigger further upside, with the next resistance zone in the ₹2,400 – ₹2,600 range,” said Mandar Bhojane.

According to him, on the downside, immediate support is placed at ₹2,100, while a stronger support level is seen at ₹2,060. He believes the overall trend remains positive, with the potential for further gains if bullish momentum persists.

Meanwhile, Voltas stock price is registering a strong breakout above key resistance levels, backed by rising volumes and a bullish crossover of the 20, 50, 100, and 200-day EMAs.

“This technical setup indicates strong upward momentum, with the potential for further gains if the stock sustains above the ₹1,500 mark. The next resistance zone is seen at ₹1,600 – ₹1,700, which could act as the next upside target. On the downside, immediate support is placed at ₹1,440, with a stronger support level at ₹1,400,” said Bhojane.

The overall trend remains bullish, and volume-backed price action suggests the possibility of an extended uptrend in the near term, he added.

According to Bhojane, “For momentum traders, Blue Star looks stronger; for breakout and dividend investors, Voltas is appealing. Fundamentally, Blue Star has stronger revenue growth (25.3% YoY), while Voltas has a higher P/E and dividend payout.”

Anshul Jain, Head of Research at Lakshmishree Investment and Securities, also highlighted Blue Star’s technical strength.

“On the charts, Blue Star stock stands out with superior relative strength, accumulation volumes, and momentum. The stock is a strong buy at ₹2,200, with a stop-loss below ₹2,000. Given the bullish setup, an immediate upside toward ₹2,800 is likely in the near term. As demand surges, Blue Star remains a top contender for capturing gains in this sector,” Jain said.

Which AC stock to buy?

Both Voltas and Blue Star present strong investment opportunities in the AC sector this summer. Blue Star currently exhibits superior momentum and fundamental strength, making it a preferred pick for growth-focused investors. Meanwhile, Voltas’ recent breakout and long-term manufacturing strategy position it as an attractive choice for investors looking for stability and dividend income.

As demand surges with rising temperatures, investors should consider their risk appetite and investment horizon before making a decision. While Blue Star offers near-term growth potential, Voltas could be a strong long-term player as it restructures its business model.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.