The Indian AC company that makes less than it sells

In October 2024, a company in Gurugram sold off one of its businesses for ₹276 crore.

The assets it handed over were worth ₹14 crore on the books.

That single transaction produced a pre-tax gain of ₹262 crore — which was more than the company earned from running its entire actual business that year.

The company is Carrier Airconditioning & Refrigeration Limited. You've almost certainly stood under one of its air conditioners — at an airport, a metro station, a mall, maybe your office. And unless you trade unlisted shares, you've probably never heard of it as a company.

It's 96.5% owned by Carrier Corporation, Delaware. The ultimate parent is Carrier Global Corporation, USA — founded on the legacy of Willis Carrier, the man who invented modern air conditioning in 1902.

It is not listed. It does not do earnings calls. And its last two annual reports tell a story that is far more interesting than the polite corporate language they're written in.

Let's start with what they actually make.

Most people think "Carrier = AC." That's about a third of the truth. There are five distinct businesses here, and they're very different animals.

This is the visible end. Hi-wall splits, inverter cassettes (those square units in false ceilings), ducted units, floor-standing towers. Sold under two brands — Carrier and Toshiba (Carrier acquired Toshiba's HVAC business globally in 2022).

Capacities from 1 TR up to about 22 HP. Recent launches include the Carrier 3-Star Inverter Cassette with a honeycomb panel, a one-way cassette for premium spaces, and Toshiba Shibui — a premium hi-wall range with a matte finish, PM 2.5 filters and, oddly specifically, an industry-first USB-C remote.

VRF stands for Variable Refrigerant Flow. In plain terms: one big outdoor unit feeds many indoor units, and each room can be set to a different temperature independently. It's what modern office buildings, hotels and high-rise condominiums use instead of dozens of separate split ACs.

Carrier sells the XPower series (standalone modules up to 38 HP, combinations up to 114 HP) and Toshiba's SMMS range. This is the fastest-growing category in Indian commercial cooling, and Carrier says it grew faster than the market here.

This is where the real engineering lives, and where most people's understanding stops.

A shopping mall or an airport isn't cooled by air conditioners. It's cooled by a chiller plant — a machine that chills water, which is then pumped around the building through pipes, and fans blow air over those pipes to cool each zone.

Carrier makes three types:

• Scroll chillers (30RB) — smaller, 63 to 1,952 kW

• Screw chillers (30XW, 30XF, 30KA) — mid-range, 250 to 2,500 kW

• Centrifugal chillers (19XR, 19MV, 19DV) — the giants, up to 10,548 kW

The 19MV uses magnetic bearings — the rotor floats on a magnetic field instead of sitting on oil-lubricated bearings. Less friction, less energy, no oil. The 19DV is oil-free too.

They also make the delivery hardware: AHUs (Air Handling Units — big boxes that push conditioned air through ducts) and FCUs (Fan Coil Units — smaller versions for individual zones).

Completely separate business. These are the refrigeration units bolted onto trucks and vans that keep ice cream, vaccines and vegetables cold in transit. Product lines: Supra (large trucks), Citimax (vans), Oasis, and now Pulsor eCool — their first fully electric unit for light commercial vehicles.

There's a software layer too: Lynx Fleet, a telematics platform that tracks temperature and predicts breakdowns across a customer's fleet.

Spare parts and components distribution. Carrier doesn't manufacture most of this; it imports and resells through dealers. It grew 32% last year.

AMCs, repairs, retrofits, chiller upgrades — including on competitors' installed equipment. Branded BluEdge, with an AI diagnostics layer called Abound that monitors connected chillers and flags problems before they happen.

Now for the number that reframes everything.

FY2025-26 revenue breakdown:

Fifty-seven percent of Carrier India's revenue comes from buying finished equipment and reselling it.

And here's the uncomfortable part: manufacturing revenue actually fell in FY26 (₹945 cr → ₹863 cr) while traded goods jumped 63%. All the growth came from importing.

Mostly from other Carrier companies. FY26 related-party purchases:

Carrier Asia Hong Kong alone went from ₹51 crore to ₹289 crore in one year. That single line is most of the growth story.

Total CIF value of imports: ₹1,457 crore, up from ₹968 crore.

They consumed ₹600 crore of raw materials in FY26. The bill of materials is concentrated:

And the split that matters most:

Imported: 53%. Indigenous: 47%.

A year earlier it was 42% imported, 58% indigenous.

So while every page of the annual report talks about "accelerating localisation," the import ratio went up by eleven percentage points. They're localising assembly. The expensive bits — compressors especially — still land at a port.

Look closely at that materials table and something strange appears. Total materials consumed fell 12.3% — from ₹684 crore to ₹600 crore — even though total quantity consumed rose 12.5%.

How does that happen? One line:

IDU/ODU means Indoor Unit / Outdoor Unit — semi-finished air conditioner kits. Carrier was importing these and assembling them into finished ACs at Gurugram. That counted as manufacturing.

In FY26, they simply stopped. A 99.7% collapse.

Strip out that one line and materials consumed actually rose 8.5%. The entire ₹85 crore drop in the material bill is this single item disappearing.

And the production table confirms exactly where it went:

Total room ACs sold barely moved — about 2.07 lakh to 2.24 lakh units, up 8%. But the way they got there flipped completely. They stopped building room ACs from kits and started importing them whole.

That single decision explains the traded goods explosion, the manufacturing revenue decline, and most of the margin compression, all at once.

Before you conclude "Carrier stopped manufacturing," look at the other production line:

Chiller and air-handler manufacturing grew 47%.

So this isn't retreat. It's a swap. Out of low-margin commodity room AC assembly, into high-margin applied equipment — exactly the category where they've been localising screw, scroll and centrifugal chillers.

And the margins prove the logic. Split the two revenue streams:

Thirteen percentage points of difference. The factory is getting more profitable. The trading desk is getting less.

The problem is simply that the growth came from the 20% business, not the 33% one.

Here's where most people get fooled.

Look at that reported profit line. It fell 51%.

Except it didn't. FY25's ₹453 crore included ₹250 crore of post-tax gain from selling a business. Strip that out and real profit went from ₹202 crore to ₹222 crore — up about 10%.

But now look at the other problem. Revenue grew 27%. Underlying profit grew 10%.

Why? Because of the mix. They grew a 20%-gross-margin business and shrank a 33%-gross-margin one. When you buy a finished unit from Hong Kong and resell it, you earn a distributor's cut, not a manufacturer's.

More revenue, thinner slices. That is the single most important thing happening at this company right now.

Now look at what individual inputs actually cost Carrier, per unit, year on year:

Only two lines rose in price. Both are metals. Everything else fell, and those falls are mix effects — chillers use different, cheaper-per-unit components than room ACs do.

LME copper touched a record $14,858 per tonne on 10 September 2026, up roughly 19% during 2026 and about 48% over one year. Aluminium climbed from $2,300–2,600 per tonne in 2024 to above $3,800 on the LME, a rise of 30–35% between early 2025 and mid-2026.

Every HVAC maker in India is bleeding from this. Blue Star told analysts its June-quarter margins were hit by extraordinary commodity inflation, especially copper, compounded by rupee depreciation — and crucially, that it could pass on only about 5 of a planned 13 percentage points of price increase. Voltas flagged the same combination of commodity and currency volatility as its main near-term risk, alongside the cost of re-engineering products for the stricter BEE labels that took effect on 1 January 2026.

An air conditioner is, at its core, copper tubing and aluminium fins with a compressor attached. When both metals rise 15–30% simultaneously and consumers won't absorb it, the entire industry's margins compress at once. This is not a Carrier-specific failure.

Why are copper prices at records? Because of data centre and power grid demand driven by the AI buildout.

Which is the same boom Carrier is chasing with its 30XF Z chillers and coolant distribution units.

The AI data centre wave is simultaneously Carrier's biggest growth opportunity and the reason its raw materials keep getting more expensive. Both sides of that trade land on the same P&L.

Room AC production fell 41%, yet copper consumption still rose 8.9%.

That's because a chiller contains vastly more copper than a room air conditioner — those big tube bundles are almost entirely copper. As Carrier localises chillers, its copper exposure goes up, not down.

Which means Sri City will increase the commodity risk on this P&L, not reduce it. Localisation buys you higher gross margin and control over your own bill of materials — but it also puts the metal price directly onto your income statement instead of hiding it inside somebody else's transfer price.

Short answer: yes for the industry, only partly for Carrier. Quick summary of the argument:

• The metals have genuinely exploded. LME copper hit a record $14,858/tonne on 10 September 2026 — up ~19% in 2026 and ~48% in a year. Aluminium went from $2,300–2,600/tonne in 2024 to above $3,800.

• An AC is basically copper and aluminium. Tubing, fins, coils, compressor windings. When both metals move 15–30% together, there is nowhere to hide.

• Nobody can pass it on. Blue Star managed only about 5 of a planned 13 percentage points of price increase. Voltas named commodity and currency volatility as its main near-term risk. Both are fighting for market share, so raising prices means losing volume.

• A second hit rides along: the rupee. Metals are dollar-priced, and everyone imports components. Currency depreciation multiplies the commodity blow.

• Carrier's own numbers confirm the inflation — copper +15.2% per unit, aluminium +15.6% in FY26.

• But for Carrier, copper is not the main villain. Direct copper is just 3.5% of revenue (₹110 cr on ₹3,163 cr), because it imports finished equipment rather than making it. Its real margin damage came from mix — growing a 20% gross margin trading business instead of a 33% manufacturing one — plus ₹1,457 crore of CIF imports, where every 1% of rupee depreciation costs about ₹15 crore.

• The irony holds. Copper is at records largely because of AI data centre and power grid demand — the very boom Carrier is selling chillers into.

• And it flips over time. As Carrier localises chillers, which are far more copper-intensive than room ACs, copper becomes its problem. Today Carrier is insulated because it isn't really manufacturing. That is not a comfortable reason to be insulated.

The one that produced that ₹262 crore windfall.

It was the Commercial Refrigeration (CR) business — the display freezers, chilled cabinets and cold rooms you see in supermarkets and grocery stores.

Note carefully: this is not the truck refrigeration business. Transicold stayed. CR went.

The deal:

• Buyer: Haier Appliances (India) Private Limited

• Date: 1 October 2024

• Structure: slump sale (entire business as a going concern, one lump price)

• Consideration: ₹276 crore

• Net assets transferred: ₹14 crore

• Pre-tax gain: ₹262 crore

Why? It wasn't an India decision. Carrier Global decided globally to exit commercial refrigeration, and India was one piece of that.

One neat detail: even after selling, Carrier signed an 18-month Temporary Manufacturing Agreement to keep making those products for Haier until Haier sets up its own line. So the factory kept humming while the P&L booked the exit.

They also quietly sold a subsidiary, Kidde Technologies India, in June 2024 for ₹42 crore.

In FY26, Carrier signed a 99-year lease on 39 acres at Sri City, Andhra Pradesh. It sits on the balance sheet as ₹69 crore of right-of-use asset.

Capex backs it up: ₹126 crore in FY26 versus ₹48 crore the year before. A 2.6x jump.

Two things make this interesting. First, everything currently comes out of one plant in Gurugram — a long truck ride to western and southern India. Second, Andhra Pradesh is one of the states leading India's data centre investment wave. The report doesn't connect those dots. You can draw your own.

This is the big one.

India's data centre capacity crossed roughly 1,700 MW in 2025 on a record 440 MW of new supply, and CBRE expects around 30% growth again in 2026. Capacity is projected to triple from about 1.6 GW in mid-2026 to 6 GW by 2029. Cumulative investment commitments have reached about $126 billion, with 2026 pipeline projected above $180 billion.

And AI changes the cooling requirement. Dense GPU racks can't be cooled by air alone — you need liquid.

Carrier's response: they launched the 30XF Z chiller range for data centres (now built in India, not imported), and introduced Coolant Distribution Units (CDUs) for liquid cooling.

Have they actually supplied? Yes — the report mentions winning projects with "big names setting up facilities for international players in India."

But — and this matters — they disclose zero numbers. No data centre revenue, no order book, no customer names, no MW. It's buried inside the topline with no way to extract it.

• QCO and BEE star revisions — new quality and efficiency rules that block cheap imports and favour compliant local manufacturers

• 1,200+ dealers, pushing into Tier 2/3/4 cities

• Cooling-as-a-Service — subscription cooling where a partner funds the plant and Carrier guarantees energy savings

• Premium retail push — real marketing money behind Toshiba for the first time

Profit is an opinion. Cash is a fact. So let's look at three years of it.

Three numbers should stop you.

One: dividends (₹773 cr) exceeded operating cash flow (₹531 cr). That's a payout of 146% of the cash the business actually generated. You cannot do that from earnings. You do it by selling things.

Two: capex was ₹210 crore — 39% of operating cash flow. For every ₹1 reinvested in the Indian business, ₹3.70 left as dividend.

Three: the cash balance barely moved. ₹198 crore at the start of FY24. ₹216 crore at the end of FY26. Despite taking in ₹469 crore from asset sales in between.

FY24 was a normal year. ₹273 cr generated, ₹11 cr paid out. Money stayed home.

FY25 — the Haier sale brought in ₹318 crore. Operations added ₹171 crore. Dividend out: ₹383 crore. Most of the Haier money walked straight out the door.

FY26 — and here's the one nobody notices. Operating cash flow collapsed to ₹87 crore, down from ₹171 crore. But the dividend stayed at ₹379 crore. How?

A new asset sale. ₹150 crore received as advance against the sale of an immovable property.

Two years running, the dividend was funded by selling assets rather than by the business.

Profit was fine. Working capital ate everything:

• Inventories: +₹220 crore

• Trade receivables: +₹195 crore

• Payables (offset): +₹313 crore

That's the import-and-resell model showing up in the cash flow. When 57% of your revenue is bought-in finished goods, you carry the stock and you finance the dealers. Cash conversion fell from roughly 63% of EBIT to 29%.

And a small irony worth noting: they took a ₹150 crore advance to sell a property in the very same year they signed a 99-year lease on 39 acres in Andhra Pradesh.

The dividend money isn't traceable — it goes into Carrier Global's treasury, not into a named factory somewhere. Don't over-claim that link.

But look at the surrounding facts together:

Carrier Global runs 51 factories and 39 R&D centres worldwide. India has one factory and an R&D centre spending under 1% of sales — and it pays royalty for the right to use the parent's technology.

The IP is developed abroad. Much of the manufacturing sits abroad. India buys, adds a distribution margin, and sends the profit home.

Sri City is the first real counter-signal in years. Which is exactly why capex tripling in FY26 matters more than it looks.

Carrier India isn't listed, but its shares trade in the unlisted market. Recent quotes: roughly ₹485–515.

With 10.64 crore shares outstanding, that's a market cap of about ₹5,200–5,500 crore.

That P/B of 13x looks insane until you connect it to Part 6: equity is only ₹424 crore, and it's shrinking — down from ₹579 crore a year earlier — because the parent keeps taking the money out faster than the business earns it.

The same fact is what flatters the ROE and ROCE. A denominator that keeps getting paid away makes any return look heroic.

Here's where it gets genuinely interesting. (Prices as of 11 September 2026.)

Four things jump out.

1. One: Carrier badly outgrew both. Voltas revenue fell 8% in FY26 (₹15,413 cr → ₹14,244 cr) and profit more than halved. Blue Star grew 4%. Carrier grew 27%.

2. Two: Carrier's net margin is the best of the three. 7.0% versus Blue Star's 4.2% and Voltas' 2.6%. Partly because Carrier skews commercial/applied — Voltas is heavily exposed to the brutally competitive room AC market, where it's been losing pricing power.

3. Three: the P/E gap is enormous. Carrier at ~24x versus Voltas at 83x and Blue Star at 61x.

4. Four — and this is the striking one — Carrier's ROCE is 47%, against Blue Star's 21% and Voltas' 9%. Strip out the idle cash and the operating business earns over 80% on capital employed.

That looks phenomenal. But understand why before you get excited.

It runs on negative working capital — ₹1,085 crore of trade payables, largely owed to group companies, funds the inventory and receivables. And it's asset-light because the assets are somewhere else. You earn 80% on capital employed precisely when you don't own the factories.

So the spectacular ROCE and the import dependence are the same fact viewed from two sides. Here's the uncomfortable implication: if Sri City works and they genuinely localise, ROCE will fall. And that would be good news, not bad.

So is Carrier a screaming bargain?

Not so fast.

Blue Star discloses that the data-centre MEP market is roughly ₹3,500 crore and that it does about ₹1,000 crore of that business. Carrier discloses nothing. Blue Star publishes an order book — ₹4,664 crore carried forward at March 2026. Carrier publishes none. Blue Star does quarterly calls. Carrier doesn't.

Listed companies get a premium partly because you can see inside them, and partly because you can sell.

Four of them.

The parent takes the cash — and lately, more than the business makes. Over FY24–26 the company generated ₹531 crore from operations and paid out ₹773 crore in dividends. The ₹242 crore gap was plugged by selling a business and a property. Capex over the same three years: ₹210 crore. A minority holder here is along for the ride on someone else's capital allocation.

Localisation is going backwards. Import ratio moved from 42% to 53% while the report insisted the opposite was happening. Until that reverses, every point of revenue growth costs margin.

R&D is thin. ₹18.5 crore — 0.59% of turnover. You cannot out-engineer Vertiv in liquid cooling on that budget. Carrier India deploys the parent's technology; it doesn't invent much of its own.

No exit. Unlisted shares are illiquid, hard to price, and there is no announced IPO. The FY26 secretarial audit confirms the company isn't listed on any exchange and raised no public money. The "pre-IPO" framing on broker websites is their sales pitch, not company guidance.

Carrier India is a genuinely good business wearing an awkward structure.

It has the widest product range of any HVAC player in India — from a ₹40,000 room AC to a 10 MW centrifugal chiller. It's growing faster than Voltas and Blue Star combined, at better net margins. It's sitting in front of a data centre buildout that could triple in three years. And it's building a second factory in the right state.

It also earns a 47% return on capital employed — more than double Blue Star and five times Voltas.

But it's also a company that's growing by importing rather than making, that has funded two years of dividends by selling assets, that spends under 1% of sales on R&D, and that tells its shareholders almost nothing. And that gaudy ROCE exists partly because the heavy assets sit on someone else's balance sheet.

The Sri City plant and the localisation programme are the stated fix. Both are three-to-five-year stories.

So watch one number in next year's report: the imported versus indigenous split. If it drops back below 50%, the strategy is working and the margins follow. If it climbs again, then Carrier India isn't really a manufacturer any more.

It's a very well-run import desk with a factory attached.

Until next time.

• Carrier Airconditioning & Refrigeration Limited, Annual Report 2024-25 and Annual Report 2025-26

• Screener.in — Voltas Ltd and Blue Star Ltd consolidated financials (11 September 2026)

• CBRE, JLL and Vestian data centre market reports, 2026

• Blue Star Q4 FY26 and Q1 FY27 earnings calls; Voltas Q1 FY27 earnings call (secondary coverage)

• LME copper and aluminium price data, 2026

This is an explainer, not investment advice. Unlisted shares carry liquidity, valuation and disclosure risks that listed equities don't. Do your own work.