AC sales slump in Q1FY26 as cooling demand splits; beverages, ice cream and dairy stay resilient
Unseasonal weather and 18-20% AC price hikes over recent years dragged room AC offtake in the June quarter, even as beverages, ice cream and fresh dairy logged strong growth. Mother Dairy clocked 30%+ volume growth in fresh dairy and ice cream, with quick commerce, smaller packs and impulse buying fuelling FMCG cooling categories.
What happened
Godrej Enterprises · June quarter cooling demand was mixed in India: AC sales slumped on unseasonal weather and 18-20% price hikes, while beverages, ice cream
Key facts
- AC prices up 18-20% over last few years
- industry value growth ~35% YTD
- Mother Dairy 30%+ volume growth in fresh dairy/ice cream
Why this matters
Consider bolt-ons or partnerships in fresh dairy, ice cream and quick-commerce-led impulse beverages where category momentum is structural, and reassess AC-adjacent assets whose valuations may not reflect demand and pricing fragility.
What to watch
- Q2FY26 AC primary vs secondary sales divergence in OEM commentary
- IMD monsoon withdrawal and pre-festive temperature anomalies
- Quick commerce GMV disclosure on cooling FMCG categories
- Raw milk procurement prices and dairy gross margin trajectory
- Any AC OEM announcing price cuts or extended warranty/financing schemes
- Mother Dairy, Amul, Hatsun capacity expansion or IPO filings
- Track dealer-level AC inventory days and festive-season discounting depth across Voltas/Blue Star/Daikin
- Map quick commerce SKU velocity for ice cream and beverages vs GT to quantify channel shift
- Build watchlist of cold-chain and dairy capacity announcements over next two quarters
- Stress-test AC OEM FY26 guidance against a flat-to-negative volume scenario
- Identify private label and D2C ice cream brands gaining shelf share on quick commerce