India may be witnessing one of its harshest summers, with temperatures soaring close to 50°C across parts of North and Central India. Yet, the extreme heat is not translating into the air-conditioner boom that the industry had anticipated.
Major players including Voltas Ltd., Blue Star Ltd., Daikin India and Godrej Appliances are reporting sales growth of 15-20% compared to last year — far below industry expectations of 25-30%. Industry executives say that part of this growth is coming off a low base of 2025, when sales saw a year-on-year decline. If we compare it to the blockbuster 2024, the growth remains as low as 10-15%.
"There is a lot of uncertainty around war, and that's primarily impacting demand," Voltas Ltd Managing Director Mukundan C P Menon told NDTV Profit.
The mass segment, particularly, is under pressure, pointed out Kamal Nandi, Executive Vce-President (appliances business) at Godrej Enterprises Group. "This segment is not growing, perhaps because consumers are reacting to rising costs driven by the Gulf war."
Manufacturers have taken price hikes of about 8-10% so far this year to offset increasing raw material costs. Prices of copper, a key competent for AC manufacturing and a weaker rupee have pushed costs up across the category.
At the same time, higher fuel prices — up by nearly Rs. 7.5 per litre — along with rising household expenses are weighing heavily on consumer spending.
Dealers had stocked up ahead of the summer season, expecting strong demand after last year's sales were disrupted by unseasonal rainfall. Inflation, however, appears to have quickly dampened those expectations.
"The war-led supply chain crisis doesn't seem to be the major issue now...it is the primary sales," according to Blue Star MD B. Thiagarajan. "There's an uptick in the North and West markets, while South remains a laggard."
K J Jawa, Chairman and MD of Daikin India, echoed similar concerns, saying demand remains uneven across markets. "Sales have grown about 20% YoY but would have been stronger if inflationary pressures had not burnt a hole on consumers' pockets."
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