The second quarter turned out to be one of the softest periods for the room air conditioner category in recent years. Industry estimates suggest a thirty to thirty five percent year on year drop for April to June. The sharp fall came after an early heatwave raised expectations for a strong summer season. Large brands felt the impact clearly. Voltas reported a decline of nearly twenty five percent in its unitary cooling products business, Havells' Lloyd portfolio slipped by more than thirty percent, and Blue Star registered a drop of over thirteen percent in its residential cooling segment.
India's AC penetration remains low at under ten percent, which usually cushions category demand. This time the weather overpowered the structural growth story and created a mismatch between customer demand and dealer inventory.
Aggressive AC deals of the year
For consumers, the weak quarter opens up a narrow window of opportunity before the next model cycle begins. Heavy inventory across key markets is expected to translate into better offers on inverter ACs, five star units and older 2023 and 2024 models that dealers are eager to clear. Buyers planning a pre summer upgrade may see the most favourable prices between now and early February. However, shoppers must be cautious of older three star units from previous cycles that may be discounted aggressively. Although had the Government not announced the GST reforms, there might be even bigger pile up but even now it is expected that people may get good options when the 2026 sales start.
Pivot to Hot and Cold ACs
Across conversations with leading companies, including Godrej, Blue Star and Panasonic, a clear pattern has emerged. All three expect hot and cold ACs to become a strategic lever for year round demand. Blue Star expanded its hot and cold portfolio during the 2025 season after realising that ACs can be positioned as a twelve month purchase rather than a category linked narrowly to peak summer.
Large brands are also recalibrating inventory planning, advancing connected AC development and tightening their focus on high ISEER inverter units where margins remain stable even in uncertain quarters. Production adjustments for Q3 are already visible as companies attempt to realign stock with realistic demand.
Weather Volatility
The prolonged monsoon has exposed how fragile seasonal categories can be. Retailers reported stronger resilience in parts of North India, while South and West India saw sharper drops due to earlier rainfall. The category is no longer moving uniformly across months. Climate volatility, uneven heatwaves and unpredictable monsoon patterns are becoming influential drivers of consumer behaviour.
The festive period provides a boost for premium appliances but ACs remain a low share product during this window. As a result, a weak summer is rarely offset by Diwali sales. Brands now see the need for weather forecasting, leaner stocking and sharper regional strategies.
Smart Buying Choices for Shoppers
Shoppers should look for inverter based five star ACs from the 2023, 2024 and 2025 cycles, especially if dealer stocks look heavy. Offers on extended warranties and installation packages will become more common as brands try to protect margins and clear inventory. Those planning to wait for 2025 launches should be prepared for a staggered summer rollout, because production timelines have shifted after the Q2 slowdown.
This season has shown that India's AC market is evolving into a timing-driven category. Heat is no longer the only growth trigger and a single monsoon can reshape quarterly performance for even the largest players. The winners in 2025 will be brands that hedge weather risk with better planning, stronger hot and cold portfolios and tighter channel discipline. For consumers, the rare upside is a short window where slow demand translates into meaningful price advantage.
