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Consumer durables makers are, however, hoping for a pick-up in sales from mid-May until July, with extended summer, particularly in North India.
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MOORTHY M
After a promosing start to the summer this year, unseasonal rains in some parts of the country and lower-than-expected tempratures have hit sales of air conditioners in April and first week of May, though AC makers hope for an extended summer to make up for the subdued so far.
While sales have been impacted across the country, a decline of up to 30 per cent has been witnessed in South India, retailers said. Leading makers of room ACs said that their sales volumes in April have grown in mid-single digits compared to their expectations of 20-30 per cent growth.
Consumer durables makers are, however, hoping for a pick-up in sales from mid-May until July, with extended summer, particularly in North India.
“January, February were good, but as the season moved into summer, there have been rains and thunderstorms in some parts of the country, which have brought down consumer sentiment. The initial sentiments were good, but the summer has begun late. I believe it will be an extended one. Hopefully, we will be able to make up for what we have now been able to encash initially. We are buoyant that the summer will be extended. We intend to grow, but it will depend on this summer season,” said Pradeep Bakshi, Managing Director & CEO of Voltas Ltd, during a company earnings call.
Analysts have pointed out that with a decrease in demand for air conditioners, consumer durable makers are sitting on high inventories, which they had stockpiled in anticipation of a hot summer that would send demand spiking.
“Unseasonal rains in April/May have impacted AC demand, which would be reflected in weak primary sales in 1Q26 as inventory remains elevated. Rising competition and aggressive pricing/higher discounts to recover market share are likely to lead to margin risks for Voltas despite production-linked incentives (PLI). Increased backwards integration should keep costs elevated,” said a Nomura commentary on Voltas.
“The company is hopeful that with the IMD forecast of a tough summer from May 12, there will be a pick-up. We are a seasoned player, and it will be a disappointment if the rains continue throughout the summer. Last year, we were not happy in the room air conditioner segment in Q1, and we did not get market share, but it picked up, and we did better in Q3 and Q4. Our goal is to have 15 per cent market share quickly,” said B Thiagarajan, Managing Director of Blue Star Ltd, during an earnings call.
Thiagarajan estimated that that the sales would have grown 5 per cent in April, compared to its internal target of 25-30 per cent.
The company, in its near-term outlook, stated that April witnessed milder weather and softer growth. Going by the weather forecast, the company expects the demand to pick up in May and June.
“The RAC industry started CY25 with a 10 per cent revenue growth expectation for summer, on a high base. This went to over 20 per cent in Feb-Mar-25, owing to the early onset of summer in some regions, heat alert by IMD and dealers stocking in anticipation of strong demand. However, given the weak secondary sales in Mar-Apr-25, industry revenue growth expectations have again tapered to 10 per cent, with hopes pinned on a demand pick up in North and extended summer,” stated BNP Paribas
Retail
Consumer electronics retail chains pointed out that the category was also impacted by fewer heat waves in southern India this year. Companies are expecting the air conditioner category to grow in low-single digit up to 3 per cent this summer.
“The temperatures did not go up in the South region as expected because of unseasonal rains. The west region also saw continuous rains for two weeks, which has resulted in the air conditioners segment being hit. The dip in the southern region is 30 per cent, and on a country level, the decrease would be between 10 and 15 per cent. Even in the north, the temperatures did not go up as expected. The overall growth of air conditioners depends on the last two weeks of May and early June, and if there is a delayed summer, then only the category will revive. The revival is also we are anticipated in north India,” Nilesh Gupta, Director, Vijay Sales, told businessline.
Published on May 12, 2025
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