Air conditioner makers expect the improvement in sales in the quarter ended June to sustain on growing order books and delayed monsoon in parts of India even as slowing consumption has affected everyone from the makers of cars to consumer goods.
“Demand is still high in July and August so far and we’re seeing a revenue growth of around 37 percent,” said Sunil Shankar, business head (AC division) at Mirc Electronics, which sells consumer durables under the Onida brand. “The AC industry is doing well in spite of the economic slowdown seen in other businesses.” Demand is fueled by an extended summer in the northern states, Shankar told BloomgbergQuint in an interview.
Agreed Jasbir Singh, chairman and chief executive officer of Amber Enterprises Ltd, a Haryana-based contract manufacturer. Singh said their order book was “strong” and off-take continued in the first two months of second quarter—usually a lean period.
Inverter air conditioners cushioned the makers of cooling appliances as they grappled with piled-up inventory and a slowing economy during the first quarter. The industry went into this summer with a huge pile-up of stock as demand fell last summer on account of unseasonal rains and energy-rating changes.
Onida also expects improvement in margin metrics on the back of lower raw material costs. “The industry would maintain the same price levels and target to grow more,” Shankar said. “The call (on prices) will not be taken at least till the third quarter.”―Bloomberg Quint