(Bloomberg) -- A blistering summer gripping a significant portion of India is fueling optimism of higher earnings for one segment of the nation’s $4.8 trillion stock market.

Varun Beverages Ltd. and Havells India Ltd. are among eight producers of aerated drinks, power generators and appliances such as refrigerators and fans that have seen an average increase of 6.3% in their 12-month ahead earnings per share estimate since early April, data compiled by Bloomberg showed. 

In contrast, earnings upgrades for the benchmark NSE Nifty 50 index have slowed to 2.7% from over 4% in the previous quarter.

“Heat waves are accelerating the penetration of many cooling products like air conditioners and refrigerators,” said Vaibhav Sanghavi, a hedge fund manager at ASK Group. “We will see sustained earnings growth in these companies as demand is robust, but it will be important to see if it reflects in margins too.” 

Read More: India Warns of Hotter Conditions Ahead After Issuing Heat Alerts

India recorded its highest temperature of 50C (122F) in Rajasthan on Saturday. The hot spell coincides with the nation’s weekslong elections that’s drawn million of voters to campaign rallies and polling stations. This heightened activity is expected to further amplify the impact of extreme weather and drive up demand for heat-combating products.  

However, the surge in the share prices of these companies has also driven up their valuations. Air conditioner manufacturers, for instance, are trading at more than a 30% premium to their long-term average one-year forward valuation. Power generator NTPC Ltd. is trading at more than 100% premium to its long-term average forward valuation. 

Shares of aircon maker Voltas Ltd. and Havells have rallied more than 20% this quarter so far, while Adani Power Ltd. has seen a 33% increase. 

Product inventory “has started to disappear from our warehouses,” Voltas’ Chief Financial Officer Jitender Verma said after the company’s fourth-quarter earnings on May 3. “I am sure no matter how good a planner you are, I don’t think this kind of growth would have been planned by anybody,” he said.

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