Coal India, Amber Enterprises, and Varun Beverages Surge Up to 9% Following IMD's Heatwave Alert

Manufacturers of air conditioners, chilled beverages, and power companies experienced a rise in stock prices on March 6, as investors anticipated increased sales with the approaching summer season. This surge follows recent gains in these stocks after the Indian Meteorological Department (IMD) forecasted above-normal temperatures and an increase in heatwave days across India starting in March, following an unusually warm February.

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Surge in Consumer Durables and Cooling Solutions

Amber Enterprises’ share price climbed over 9%, reaching an intraday peak of ₹6,350 per share. The company specializes in producing complete Room Air Conditioning (RAC) solutions with various specifications and ratings, along with printed circuit boards (PCBs).

Whirlpool, known for manufacturing refrigerators and other appliances, also experienced notable gains. Whirlpool’s share price rose nearly 3%, trading at ₹986 per share. Similarly, shares of air conditioning company Voltas increased by nearly 2%, reaching ₹1,411.50 per share.

V-Guard Industries, a company that produces inverters for consumer appliances, also witnessed a rise in its share price, gaining nearly 2% to trade at ₹329 per share. These summer-related stock gains propelled the Nifty Consumer Durables index into positive territory.

The demand for cooling appliances and consumer durables is expected to soar in the coming months as the country braces for extreme temperatures. Historically, companies in these sectors witness higher revenues during heatwaves as households and businesses ramp up purchases of cooling equipment. Analysts believe that this trend will continue, pushing stock prices further upward.

Beverage and FMCG Stocks Gain Momentum

Additionally, the share price of Pepsi bottler Varun Beverages climbed almost 3% to ₹489.60 per share. However, despite this uptick, the stock remains near its 52-week low of ₹419.55, which it reached earlier this month. Global brokerage firm Jefferies maintained a ‘Buy’ recommendation for the stock, setting a target price of ₹715.

The food and beverage industry is expected to benefit significantly from rising temperatures, as demand for cold drinks and packaged refreshments typically spikes during hot months. Companies producing ice creams, juices, and soft drinks could witness a boost in sales, making FMCG stocks a segment to watch.

Power and Energy Stocks on the Rise

As temperatures rise, so does electricity consumption, leading to an increase in power sector stocks. The share price of Coal India surged nearly 4%, trading at ₹383 per share. The stock has seen substantial recovery after hitting a 52-week low of ₹349 on February 17. ICICI Securities has reiterated its ‘Buy’ rating on the stock, with a target price of ₹440 per share.

Meanwhile, NTPC’s share price rose more than 2%, trading at ₹334 per share. This stock, too, has rebounded from its 52-week low of ₹293, recorded on February 17.

With air conditioning units and cooling devices expected to run at full capacity, the power sector could see strong demand. Experts note that rising temperatures also put stress on electricity grids, increasing the need for coal-powered energy generation.

The rally in energy-related stocks also drove the Nifty Energy index up by nearly 2%, reaching around 31,711.

IMD’s Warning and Government’s Climate Strategy

On February 28, the IMD projected that both maximum and minimum temperatures would likely exceed normal levels in March, except in some regions. Furthermore, India is expected to experience a higher-than-usual number of heatwave days between March and May.

"Heatwaves present serious health risks, particularly to vulnerable groups such as the elderly, children, and individuals with pre-existing medical conditions, increasing the likelihood of heatstroke, dehydration, and stress on infrastructure. Citizens are strongly encouraged to take preventive measures, including staying hydrated, avoiding exposure to peak sun hours, and seeking cooler environments to reduce the health impacts of heatwaves," the IMD stated.

Following the release of Q3FY25 GDP figures, Chief Economic Advisor V. Anantha Nageswaran was asked about the economic implications of February's unusually high temperatures. He responded by noting that the government is actively implementing measures to address the challenges posed by climate change and global warming.

Industry experts suggest that infrastructure improvements, increased renewable energy adoption, and public awareness campaigns could help mitigate the effects of extreme weather. As climate patterns become more unpredictable, businesses and policymakers are closely monitoring their impact on economic growth and market trends.