Early monsoon showers dampen demand for cooling appliances

The sudden weather shift has left manufacturers and retailers grappling with excess inventory and weaker-than-expected sales across categories like ACs, refrigerators, and beverages. 

Industry executives say overall sales in April and May fell 10–15% year-on-year, reversing early-season optimism driven by forecasts of a harsh summer. With the India Meteorological Department (IMD) now predicting a wetter June, companies are recalibrating expectations for the first half of FY26.

“This year the summer season kicked in early, and we witnessed a spike in AC sales volumes in February, March and April. However, this momentum was dampened later due to early showers," Kamal Nandi, business head and executive vice-president at appliances business of Godrej Enterprises Group, said.

For the industry, south, east, and west regions have together reported a 20-25% drop in sales, which could be an impact of intermittent rains in the first half of May, he said.

However, "Our AC installation data is indicating that demand is improving and already we are at 15-20% growth in May over last year. We are keeping a close eye on the weather and the demand in the market," he added. 

Lower temperatures have reduced the use of cooling appliances such as air-conditioners, Mint reported last month. In fact, unseasonal rains and thunderstorms in May kept temperatures low, pulling down electricity usage by 2% year-on-year for most of the month.

To be sure, summer sales account for a bulk of purchases for cooling devices such as air-conditioners, fans, and coolers.

However, unseasonal rainfall plays a spoil sport.

IMD adds to industry worries

Last week, IMD projected above-normal countrywide rainfall for June 2025. While most regions are expected to see normal to above-normal rainfall, some areas, specifically parts of the southern peninsular region, Northwest, and Northeast India, are likely to experience below-normal rainfall.

Regarding temperatures, the IMD forecasts normal to below-normal maximum temperatures across much of India for June. However, many parts of northwest and northeast India are expected to have above-normal maximum temperatures. Minimum temperatures are predicted to remain above normal across most of the country. Exceptions include some regions of central India and the adjoining southern peninsula, where normal to below-normal minimum temperatures are anticipated.

It's worth noting that the IMD's April forecast had predicted above-normal temperatures and more heatwave days for this summer. As a result, retailers stocked up on supplies.

"It was a washout summer or a wet summer for the air-conditioner industry. This season is going to be down 25% compared to the previous year—in both value and volumes," said B. Thiagarajan, managing director at air-conditioner maker BlueStar.

Last year, the industry had reported a 70% jump in sales of air-conditioners during peak summer season, he said.

“We were expecting at least a 25% jump in sales this summer season following the IMD forecast for a strong summer...we were prepared with strong inventory and huge growth at the beginning of the year. In March, the dealers lifted much more than what we anticipated. However, the rains started in April—in the process we have seen growth of only 5% due to intense rains," he added.

Companies are now pinning hopes on the festive season in the second half of the year to liquidate excess inventory.

“Despite the current challenges, there is confidence in achieving a 10% growth by year-end. Retailers are expected to hold on to excess stock until the festive season," he added.

Retailers, on the other hand, said demand for cooling products is down by 30-35% on a relatively high base of last year. 

"Not just early monsoons, unseasonal rainfall has also impacted business. Refrigerator business has been similar to last year. It's been a very poor summer," said Nilesh Gupta, managing director, Vijay Sales.

Gupta however said air conditioner stock will be liquidated over the coming 2-3 months or till October.

Also read: Mint Primer: Will the summer of ’25 break last year’s records?

Beyond appliances

To be sure, last year’s high growth (40–60%) in summer products due to a nationwide heatwave has created a high base, impacting growth rates this year.

“In anticipating a stronger summer season, many companies and retailers had stocked up excess inventory by March, leading to large unsold stocks. India is experiencing unusual weather in May with frequent thunderstorms and rains," analysts at Nuvama Institutional Equities said in a report released Monday.

"The typical heat low over Northwest India, which is essential for monsoon development, is currently weak. IMD predicts an early onset of monsoon in Kerala and southwest regions. Companies are cutting production of summer products such as ACs, beverages, and talcum powders by up to 25% due to weak sales and excess inventory, following unexpected weather changes and an early monsoon forecast," the report said.

This is expected to impact summer sales over the first half of FY26.

During Emami Ltd.'s post-earnings call on 19 May, Mohan Goenka, vice-chairman and whole time director, said that the June quarter was proving to be "challenging" for the company's summer product portfolio, which includes cooling hair oils and talcum powder. 

“We saw a steep growth in the March quarter, so primaries happened. Unfortunately, southern markets and some parts of east and west have not done so well…we are seeing sporadic rainfalls across India… so the summer has seen a slight dent. I think let us wait for another two or three weeks, if we see some rebound, we have a higher base," he said.

Also read: Farmers boost summer sowing ahead of promising monsoon season