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AC Sales Dip: Heatwave Fails to Boost June Demand
27 Jun
Summary
- AC makers saw strong April-May growth, but June demand softened.
- Inflationary pressures and price hikes impacted consumer spending.
- Regional weather patterns significantly influenced sales performance.
Air-conditioner manufacturers reported strong growth in April and May, but experienced a decline in June due to shifting weather patterns and inflationary pressures. The industry saw volume growth in the June quarter compared to the previous year, which had a weak summer, but sales remained flat compared to the first quarter of fiscal year 2025.
Analysts noted a softening of demand, partly due to AC companies increasing prices by 5-20% to offset rising raw material costs and currency depreciation. While the industry anticipates a 30% value growth for the June quarter over the last fiscal year, profit margins are under pressure as companies haven't passed on the full cost increases to consumers.
Demand in the June quarter was highly dependent on regional weather. The Southern region showed resilient demand, while North and Central India experienced a slowdown in June following heavy sales in late April and May due to unseasonal rains. Consumers in the Eastern region displayed higher price sensitivity.
