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Informist, Tuesday, Jun. 30, 2026

 

By Avishek Rakshit

 

KOLKATA – Unusually high discount and strong summer heat led to demand for air conditioners picking up in Apr-May which continued in June as well, albeit at a slower pace. It helped clear the huge stockpile of air conditioners which were lying idle with retailers.

 

Retailers in Kolkata said that currently, their inventory has reduced to around 16 days which is still higher by two days than the usual average of a fortnight. At the start of the summer season in April, the average inventory with the retailers was as high as 4-8 weeks. The inventory overhang, dealers said, was on account of air conditioning companies producing excess volumes last financial year in anticipation of a strong summer which got largely dumped with the sales channels. 

 

"However, with the summer becoming harsh this year and the continued sweltering heat even during the monsoon season, we have seen a strong uptick in sales in April-May," an official at retail chain Reliance Digital in Kolkata said. 

 

The official at Reliance Digital said that demand for air conditioners remained strong but weakened on month in June on account of the monsoon season setting in, which usually  brings down the mercury. 

 

"However, the rains have been erratic and high humid conditions are leading to higher level of uncomfortability in east India which is helping push up sales even in June," the official at Reliance Digital said. 

 

Retailers in Kolkata and Delhi said sales in value terms in Apr-Jun were up by as much as 30% on year. To a large extent, this high sales growth was on account of a lower base in the corresponding months of the last financial year when temperatures did not soar high enough to generate strong demand for air conditioners. 

 

Earlier this month, industry leader Voltas Ltd. said that it had crossed the milestone of 1 million air conditioner sales in the first three months of 2026-27 (Apr-Mar) itself which, the company described as a landmark.

 

In an investor call in May, Blue Star Ltd.'s Group Chief Financial Officer Nikhil Sohoni had said that demand for room air conditioners picked up towards the end of the last financial year, helping the company post highest ever quarterly revenue in the March quarter.

 

Manoj Gori, director – equities of equity research at Equirus Securities said sales volume pan India rose 15% on year in April, 40% on year in May, and 17% on year in June. 

 

"Weather is the most important driver, which is further supported by low penetration levels, better power supply, and others, among macro tailwinds," Gori said. 

 

However, the demand for air conditioners is being driven by huge discounts as well. "We are seeing demand for discounted air conditioners being strong," an official at a Tata group-owned Croma store in Delhi said. Across retail stores, these 1.5 tonne discounted air conditioners are priced INR 28,000-INR 57,000.

 

Croma is offering steep discounts in the range of 30-50% on inverter air conditioners just to clear old stocks, according to prices reviewed by Informist at Croma stores in Kolkata. Reliance group-owned Reliance Digital is also offering steep discounts in the range of 20-50% on earlier years' air conditioner models. The discounts are inclusive of online and offline sales.

 

Asked about discounts, the official at Reliance Digital said that consumer sentiment has been hit to some extent on account of the price hikes by the air conditioning companies which were rolled out in Feb-May in a staggered manner. Prices of air conditioners went up by 5-20?pending on the model, star rating, and make. 

 

"A price rise definitely mutes demand, but the discounts helped us overcome muted consumer demand and the sweltering heat played a major role in consumers' decision to purchase new air conditioners," the official at Reliance Digital said. 

 

Even as air conditioning companies witnessed strong demand in the peak summers, raw material inflation and their inability to fully pass on the rise in input costs may negatively impact their margins. 

 

Gori said that although margins may improve on year, companies such as Blue Star may see its margins contracting on quarter. However, companies such as Voltas, LG and Lloyd may see an improvement in margins on quarter, he said. 

 

"We expect margins to see the entire impact of raw material inflation and INR depreciation in Jul-Sept period. We expect some ease in cost headwinds from Oct-Dec quarter onwards," Gori said. End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Akul Nishant Akhoury

 

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