Consumer durables sector to reach INR 1 trn in FY23

The sector is expected to witness a double-digit growth

September 9, 2022

The rate of revenue is expected to increase by 15-18%

The sector’s value has already crossed the pre-pandemic levels in 2021 and is expected to do so in terms of volume by 3%, this year

The demand will be mostly led by ACs and refrigerators

Volume growth will totally rise by 10-13% this year

India’s consumer durables sector is expected to witness a double-digit growth this year, with an increase in revenue by 15-18% to INR 1 trillion this fiscal, according to a report by Crisil.

In the second half of this fiscal year, a 10-13% spike in demand will be observed in the category, driven by both urban and rural markets. The demand will be mostly led by ACs and refrigerators. According to the report, the sector’s value has already crossed the pre-pandemic levels in 2021 and is expected to do so in terms of volume by 3%, this year. 

Industries are expected to make reduced profits due to an increase in raw material prices, and unfavourable foreign exchange conditions. However, the key players in the industry have strong credit profiles. 

Experts said that an increase in urban income and crop prices support demand growth. Volume growth will cumulatively rise by 10-13% this year, due to reasons including shorter replacement cycles, up-trading, increasing finance penetration, and changing weather patterns.

Last year, the consumer sector contracted by 180-200 basis points; however, the decrease in operating margin this year will be nominal. In addition, input prices are higher than historical levels, even though they have declined from their peak in the last two months.
Source: Business Standard