Unseasonal Rains Cool Off Summer Sales, May Hit Retailers' Q1 Growth Targets — Profit Exclusive

Unexpected summer rains in April and May have hit sales of seasonal essentials—from air conditioners and ice-creams to cold beverages and personal care products—prompting companies to cut their growth targets for the first quarter of fiscal 2026 and curb production to avoid an inventory glut.

Manufacturers of ACs such as Havells, Voltas, Blue Star, Panasonic, and Godrej Appliance have seen a 20-25% year-on-year decline in sales during April and so far this month.

"In the first three months of the year, our residential AC business recorded more than 30% growth compared to last year, but the demand since April has been a matter of concern," Abhishek Verma, business head of AC Group at Panasonic Life Solutions India, told NDTV Profit.

Inventory levels are being "closely monitored," and a calibrated approach is being taken to ensure healthy stock rotation across markets, he added.

Companies stocked up in anticipation of a repeat of last year's bumper sales, when a prolonged heatwave caused a major supply shortfall—an estimated 40-50 lakh AC units. Retailers had lifted about four million AC units in March, according to Blue Star managing director B Thiagarajan.

"But April had not been a month which delivered in line with that outlook. In my view, there were anywhere between 15 lakh and 20 lakh units more in inventory than what should have been there," he said during a post-earnings call, adding that the industry would have de-grown 15-20%.

Sales took a beating predominantly in the southern, western, and eastern parts of the country. "These three regions have together reported a 20-25% drop in sales due to intermittent rains," said Kamal Nandi, business head and executive vice president of appliances business at Godrej Enterprises Group. "Accordingly, production levels have been optimised to ensure there is no piled-up inventory. We're keeping a close eye on the weather."

Companies are painting a cautious outlook for the June quarter with weather vagaries taking a toll on consumer spending during the peak season. IMD's forecast of an early monsoon this year has further added to their woes.

"It's very difficult to give you any kind of guidance as to what kind of percentage growth we will be able to achieve," said Pradeep Bakshi, chief executive officer and managing director of Voltas.

Havells, which sells ACs under the Lloyd brand, also expects slower consumer offtake in April to impact June-quarter primary sales.

April, May and June are crucial for companies dealing in summer products, accounting for nearly half of their annual sales. Industry executives are now hoping that a spike in temperatures from June onwards will trigger a rise in demand, enabling them to meet their full-year growth targets.

"While there has been a short-term delay in consumer purchases due to unseasonal rains, the past trends indicate that demand typically extends through the year due to prolonged hot weather conditions," said Verma, adding that he expects demand to pick up in the latter half of the year.

Blue Star sees 7.5% growth for the commercial AC business during the ongoing financial year and an 8.5% growth each for room AC and commercial refrigeration. "We will attempt to take it to 9%, though that will be quite difficult, especially if the summer isn't strong. We want to grow faster than the market, but we weren't satisfied with our room AC performance in Q1," said Thiagarajan.

It's not just ACs, though. Other summer-centric products, including ice-cream, beverages and personal care items, are also facing similar setbacks.

"The season started off well in April... but the recent weather aberrations dampened the momentum," said Manish Bandlish, managing director, Mother Dairy Fruit & Vegetable Pvt. He expects summer sales to fall 10% short of projections.

Mohit Khattar, chief executive officer of Graviss Foods — master franchisee for Baskin Robbins in India and the SAARC region — echoed similar sentiments. "Monsoon-like rains in May have impacted trade sentiments and demand for cold treats," he said, adding that achieving the company's typical growth during the season will be "challenging" under these condition.

Beverage sales, which typically see a significant boost during the summer months, have also been lacklustre. Distributors of top beverage brands say that demand has taken a hit in late-April and May as the weather stayed unusually cool on most days due to sporadic rains. Falling sales have come hand in hand with a surge in unsold stocks, according to at least seven of them.

"Summer has not gone down so well, unfortunately," according to Mohan Goenka, vice-chairman and whole-time director of Emami Ltd. Unseasonal rains dented demand for its core summer products like talc powders.

"We have yet another four weeks of summer left... Let us hope if some markets rebound, then we might see low-single-digit growth," he added.