This year’s weather Gods might have been too kind to our farmers but not to the air conditioner makers as the first quarter of this financial year which incidentally is the busiest season for the AC makers and sets trend for the following months saw a dip in demand for room ACs. In summer this year, there were frequent thunderstorms and light rains in regions such as Punjab, Delhi-NCR, Uttar Pradesh (UP), Madhya Pradesh (MP), and Chhattisgarh. Further, Southern states experienced significantly higher rainfall in the pre-monsoon period. As per the data provided by Indian Meteorological Department, south India had pre-monsoon rains with 72%/40% excess rains in Karnataka/Kerala.
Some parts of the country, particularly the northern and eastern parts, could partly make up for the lost demand in the month of June due to rain deficit. However, it was not enough to bring the demand growth during the quarter to positive territory. Though the final figures are yet to be out, it is believed that the sales of room Acs is expected to fall by 10% in the first quarter as compared to the same period in the last financial year. Despite this setback, AC makers are hopeful about 5-7% annual growth in this financial year.
In terms of volume, AC sales dropped by 19% YoY in April. In fact, April is considered to one of the busiest months for AC sales as it marks the start of scorching heat in most of northern India.
Also, customers have started showing special preference for inverter ACs which now form more than 40% of volumes. Many companies have taken 3-4% price hike on certain models which has not impacted the demand.
However, AC makers have taken the setback in their stride and believe that one quarter dip in sales will not necessarily set a trend for the whole of the financial year. They are hopeful of covering the lost ground in the coming quarters.