Latest news with #BThiagarajan
Time of India
16 hours ago
- Business
- Time of India
Erratic weather is hurting Indian firms in the biggest consumer market
India experienced extreme weather events on 88% of days in 2024 in one or more parts of the country, according to a database maintained by Centre for Science and Environment and Down To Earth. Indian companies, already facing a demand slump, are now grappling with unpredictable weather patterns. Unseasonal rains and cooler summers have impacted sales for major players in sectors like air conditioning and beverages, forcing production cuts and inventory adjustments. Businesses are increasingly turning to advanced weather forecasting to mitigate risks and adapt to the growing challenges posed by climate change. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Some of India's largest companies, already hit by a demand slump, are facing a new threat in wooing the country's 1.4 billion consumers: unpredictable weather.A cooler-than-usual summer this year — followed by the earliest onset of rain since 2009 — has hurt companies selling everything from talcum powder to air conditioners. Blue Star Ltd. , one of the largest AC sellers in the country, had to cut production by as much as 25% between April and June, as it saw fewer buyers. It also delayed imports of compressors, a key input, and extended credit to some dealerships saddled with unsold inventories. Rivals Havells Ltd. and Tata-owned Voltas Ltd. also flagged a sales slowdown.'It's like a wedding was to happen, but the wedding has now been canceled,' said B Thiagarajan, managing director at Blue Star, adding that it was a 'painful' time.A four-fold jump in frequency, unpredictability and intensity of extreme weather events in India over the past four decades has made planning and preparedness more demanding for companies. From Hindustan Unilever Ltd. to food delivery app Zomato-owner Eternal Ltd. to engineering giant Larsen & Tourbro Ltd., it's affecting everything from sales to labor and supply chain management in the world's biggest consumer situation as one of the most affected nations by climate change provides a glimpse of what's in store for other major economies as environmental change accelerates. As record-breaking temperatures, rains and other extreme weather occur worldwide, companies are likely to be left scrambling to predict and plan for the earnings calls over the last six months, top management and equity analysts discussed 'delayed summer' and 'delayed winter' the most in five years, according to transcripts analyzed by Bloomberg News.'This quarter is slightly challenging as far as the summer portfolio is concerned,' Mohan Goenka, vice chairman of Emami Ltd., whose products include talc powder, told investors on an earnings call last month. The company will try to make up for the setback through its other segments, he added. Varun Beverages Ltd. , which bottles Pepsi in India, had said in April that it was ramping up production for the summer, expecting higher demand. Instead, unseasonal rains likely hurt performance at the beverage maker, according to analysts at brokerage also flagged weaker demand at Dabur Ltd. , which sells fruit juices, and Tata Consumer Products Ltd. , which sells cold summer demand, 'once missed, is difficult to recover,' analysts at Nuvama, led by Abneesh Roy, said in a note to incidence of heat waves, for example, was among factors causing a shortage of labor at Larsen, even as it split shifts between early morning and late afternoon. Eternal, which operates Zomato and Blinkit, said it faces a seasonal shortage of delivery workers in the Unilever, which sells skincare brands including Ponds and Vaseline, said it saw muted performance in the December quarter partly due to a delayed experienced extreme weather events on 88% of days in 2024 in one or more parts of the country, according to a database maintained by Centre for Science and Environment and Down To Earth. Between 1993 and 2022, the South Asian nation lost about $180 billion to severe heat and rains, the Climate Risk Index 2025 report forecasting in India has been plagued by outdated technology and modeling systems that make it difficult to get accurate bridge this gap, the country launched a new weather model last month to improve its forecasting by doubling the level of detail previously possible. Intended to improve farming and flood management, the model could also help companies as they seek better and more granular data.'Businesses, while they were aware of the financial impact of weather, simply did not have enough reliable data that could be potentially put to use,' said Samuel John, co-founder and CEO of forecasting firm have changed in the half-decade since Covid, and weather forecasting has gone mainstream, John of the farm sector, companies from industries such as consumption, quick commerce, logistics, and construction are increasingly approaching Skymet Weather Services Pvt., its chief executive officer Yogesh Patil said. These newer clients, who seek structured, calendar-linked forecasting dashboards, now make up about half of the Reliance Industries Ltd. unit's has also set up over 750 of its own weather stations across 60 cities to collect detailed companies navigate the new normal of erratic weather, planning and diversification are Star's management is confident of recovering a large portion of the lost sales through the rest of the year, by working with more corporate clients where demand largely remains stable. But climate mitigation is becoming an important subject to Thiagarajan, who has worked in air conditioning for four decades.'Predictability is dropping year after year,' he said. 'You can only be prepared for the worst.'
Time of India
20-05-2025
- Business
- Time of India
Summer sales catch a cold, brands cut production
Companies are cutting production of summer consumer products such as air-conditioners, beverages and talcum powders by up to 25% to adjust inventory following tepid sales in April and the first fortnight of May. This marks an unexpected reversal of fortunes for these companies who were preparing for a robust summer after the India Meteorological Department's forecast of intense heatwaves. Temperatures in most parts of the country are still expected to rise sharply and there have also been instances of intermittent rains, while India Meteorological Department has now forecasted early arrival of monsoon this year. Company executives noted that production cuts are required due to large unsold stocks as most companies and retailers had bought excess stock by March following IMD's early forecast, and to prepare themselves after the 2024 experience, where they were caught unawares when heatwaves led to record demand. "We have cut production of ACs by about 20% to reduce the overall stock in the market," said Kamal Nandi, head of appliance business at Godrej Enterprises. He said the South, East and West reported 25-30% drop in sales in April and May compared to last year. "These markets account for 60% of overall AC sales and hence the 10% growth in North is not sufficient to compensate for the loss. Overall sales in April-May have declined by 10-15% over last year," he said. A senior executive at a leading franchise bottler of a multinational beverage company said production lines-which run in double shifts in May and June-have been staggered to a single shift across most regions in the South and East. "Beverage demand has been particularly impacted in out-of-home channels (kirana stores), since soft drinks remain a largely impulse purchase," the person said. To be sure, there was an early pick up of summer products this February and March due to a weak winter but sales during the peak June quarter is crucial for the companies. The three months through June contributes 40-50% of annual sales for summer-centric products. Last year's high growth of 40-60% of summer products due to an intense nationwide heatwave further impacted growth rates due to a huge base effect. An executive at an aerated soft drink maker said, "Each day of rain in the April-May-June quarter translates to some loss of sales for the category. This drastic change in weather has been least expected and we are looking at a subdued quarter." AC maker Blue Star managing director B Thiagarajan told analysts earlier this month that while the industry was expecting 20-25% growth this summer, in April, the industry sales declined by 15-20%. He said the inventory can be quickly corrected by adjusting production. "First problem was in March itself when material was lifted (by trade) in significant quantities, which resulted in more than four million units in the market. In my view, it was anywhere between 1.5 to 2 million more than what should have been there. Then there were sporadic rains across the country," Thiagarajan said. Companies making summer-centric daily-need products said they are curtailing inventories at retail stores and mapping offtake on a real-time basis to hedge risks of excess inventories. Emami , which makes Dermicool and Golden Beauty Talc, said in a management commentary late last week that for 1QFY26, summer was "slightly impacted by sudden rainfalls, and that Southern and Eastern regions were more impacted." The company called out the impact particularly on its talcum powder offtake in April. The absence of an intense heatwave in April and May in many states is in complete contrast to earlier expectations which had led summer-focused companies to accelerate stocking as well as advertising.
Time of India
19-05-2025
- Business
- Time of India
Summer sales catch a cold, brands cut production
Companies are cutting production of summer consumer products such as air-conditioners, beverages and talcum powders by up to 25% to adjust inventory following tepid sales in April and the first fortnight of May. This marks an unexpected reversal of fortunes for these companies who were preparing for a robust summer after the India Meteorological Department's forecast of intense heatwaves. Temperatures in most parts of the country are still expected to rise sharply and there have also been instances of intermittent rains, while India Meteorological Department has now forecasted early arrival of monsoon this year. Company executives noted that production cuts are required due to large unsold stocks as most companies and retailers had bought excess stock by March following IMD's early forecast, and to prepare themselves after the 2024 experience, where they were caught unawares when heatwaves led to record demand. "We have cut production of ACs by about 20% to reduce the overall stock in the market," said Kamal Nandi, head of appliance business at Godrej Enterprises. He said the South, East and West reported 25-30% drop in sales in April and May compared to last year. "These markets account for 60% of overall AC sales and hence the 10% growth in North is not sufficient to compensate for the loss. Overall sales in April-May have declined by 10-15% over last year," he said. A senior executive at a leading franchise bottler of a multinational beverage company said production lines-which run in double shifts in May and June-have been staggered to a single shift across most regions in the South and East. "Beverage demand has been particularly impacted in out-of-home channels (kirana stores), since soft drinks remain a largely impulse purchase," the person said. To be sure, there was an early pick up of summer products this February and March due to a weak winter but sales during the peak June quarter is crucial for the companies. The three months through June contributes 40-50% of annual sales for summer-centric products. Last year's high growth of 40-60% of summer products due to an intense nationwide heatwave further impacted growth rates due to a huge base effect. An executive at an aerated soft drink maker said, "Each day of rain in the April-May-June quarter translates to some loss of sales for the category. This drastic change in weather has been least expected and we are looking at a subdued quarter." AC maker Blue Star managing director B Thiagarajan told analysts earlier this month that while the industry was expecting 20-25% growth this summer, in April, the industry sales declined by 15-20%. He said the inventory can be quickly corrected by adjusting production. "First problem was in March itself when material was lifted (by trade) in significant quantities, which resulted in more than four million units in the market. In my view, it was anywhere between 1.5 to 2 million more than what should have been there. Then there were sporadic rains across the country," Thiagarajan said. Companies making summer-centric daily-need products said they are curtailing inventories at retail stores and mapping offtake on a real-time basis to hedge risks of excess inventories. Emami , which makes Dermicool and Golden Beauty Talc, said in a management commentary late last week that for 1QFY26, summer was "slightly impacted by sudden rainfalls, and that Southern and Eastern regions were more impacted." The company called out the impact particularly on its talcum powder offtake in April. The absence of an intense heatwave in April and May in many states is in complete contrast to earlier expectations which had led summer-focused companies to accelerate stocking as well as advertising.
