Consumer Durables – Summer Demand Expected to Lift Q1FY27 Sales Growth
Consumer Durables – The consumer durable sector is expected to record a strong start to financial year 2026-27, with intense summer conditions likely to boost demand for cooling appliances and related products. A report by Centrum Broking estimates that companies under its coverage could post 21 per cent year-on-year growth in sales value during the first quarter.
Heatwave Supports Cooling Appliance Sales
Room air conditioners are projected to remain the biggest contributor to sector growth. The report expects the category to register around 30 per cent value growth, supported largely by higher unit sales during the heatwave period. Volumes are estimated to account for 18-20 per cent of the expansion, while price increases may add another 8-10 per cent.
Demand for cooling products gained momentum from the middle of April and remained firm through May. Sales began to moderate in June as temperatures eased in several regions, but the overall quarter is still expected to benefit from strong early-season demand.
Other Home Appliance Categories Show Mixed Trends
Washing machines and televisions are also likely to report growth in the low double digits. These categories are expected to receive support from price revisions of about 5-7 per cent, along with steady household demand.
The outlook is less encouraging for refrigerators, which have reportedly faced weaker growth conditions. The category did not match the momentum seen in air conditioners and other summer-led products, indicating uneven demand across the broader appliance market.
Cables and wires are also expected to record value growth of more than 30 per cent, placing the segment alongside air conditioners among the strongest performers in the quarter.
Favourable Base Adds to Growth Outlook
The projected expansion comes after a weak first quarter in the previous financial year. Unseasonal and widespread rainfall during the summer of FY26 had limited sales growth across the sector to about 1 per cent, creating a relatively low comparison base.
Centrum expects its coverage universe to report sales of around Rs 461 billion in Q1FY27. The estimate reflects both the favourable base effect and stronger seasonal demand, particularly in categories linked to higher temperatures.
Margins May Improve Despite Cost Concerns
The report expects the sector’s EBITDA margin to improve by 10 basis points year-on-year to 9.4 per cent. This would follow a sharp margin decline of about 100 basis points in the comparable quarter last year.
Profit after tax for the companies under coverage is estimated to rise 22 per cent year-on-year to nearly Rs 29 billion. The previous year’s base quarter had recorded an 11 per cent decline in profit, which may also support the expected growth rate.
Commodity Prices Remain a Key Challenge
Despite improving sales and earnings expectations, manufacturers continue to face pressure from input costs. Higher prices of copper, aluminium, PVC and resins remain a concern for appliance makers, especially in categories where raw materials account for a significant share of production expenses.
The weaker rupee has added to import costs, while shipment delays and higher ocean freight rates have increased supply-chain expenses. Rising petrol and diesel prices are also likely to affect logistics and distribution costs across the country.
Companies may attempt further price adjustments if cost pressures continue, although the ability to pass on higher expenses will depend on consumer demand and competition in individual product categories.