Cables, wires, and AC segments to lead consumer durable growth in Q1FY27: Centrum
New Delhi, July 7
The first quarter of financial year 2026-2027 is likely to be a seasonally healthy quarter for the consumer durable sector, according to a report by Centrum. Driven by an intense summer season and a higher prevalence of cooling products, the report expects a healthy Q1 led by favourable base and seasonality.
"Q1FY27 is likely to be a seasonally healthy quarter for Consumer Durable sector with our coverage universe posting 21% YoY value growth in sales," the report stated.
The product category outlook indicates distinct growth trajectories across different appliances. Room air conditioners are likely to see 30 per cent value growth, with 18-20 per cent of this expansion driven by volumes stemming from the heatwave, while price hikes contribute another 8-10 per cent.
Washing machines and televisions are expected to grow in early double digits, supported by a 5-7 per cent price hike. Conversely, the refrigerator segment underperformed and faced visible growth constraints.
This surge is further supported by a low base from the previous year when widespread rains during the summer months restricted sector growth to just 1 per cent in the first quarter of financial year 2025-2026.
"For Q1FY27, we expect our coverage universe to post 21% YoY sales growth at Rs461bn (on a favourable base of 1% growth)," the report mentioned. The demand driven by summer heat picked up significantly from mid-April and remained robust through May before it started tapering off in June.
Value growth is projected to remain exceptionally high in the cables and wires, alongside the air conditioners segment, with both categories seeing growth upwards of 30 per cent.
On the financial performance front, the sector shows signs of overall recovery despite persistent operational challenges. The report stated, "EBITDA margin is likely to rise 10bps YoY to 9.4% (100bps YoY margin decline in base qtr). PAT growth is likely at 22% YoY to Rs29bn (11% de-growth in base qtr)."
However, the sector continues to face pricing pressures on its margin front. High commodity costs for essential raw materials like copper, aluminum, PVC, and resins weigh on manufacturers. This is further compounded by the depreciation of the rupee, import delays, higher ocean freight, and rising petrol and diesel prices across the country.
— ANI
Reader Comments
Good to see cables and wires growing 30% too, that's the backbone of our infrastructure. But these raw material costs like copper and aluminum are killing small manufacturers. The rupee depreciation is making imports more expensive. Government should look into stabilizing commodity prices. 🤔
I work in this sector and can confirm the summer rush was insane. AC orders were piling up since March, but the real pain is on margins. Copper prices went through the roof and freight costs are still high. Manufacturers are balancing between passing costs to customers and losing market share. It's a tough game. 💼
Finally some good news for the economy! But I wonder if this growth is sustainable. Last year's rains ruined the base, so this 21% growth is partly statistical. Also, with diesel and petrol prices rising, logistics costs are hitting everyone. Let's hope the monsoon doesn't spoil the party again this year. 🌧️
Refrigerators underperforming is surprising, but maybe because many households already upgraded during COVID? The real story here is the margin pressure. 10bps rise in EBITDA margin is marginal. With high copper and aluminum costs, plus import delays, manufacturers need better supply chain planning. AC segment is thriving, but other appliances need innovation to stay relevant. ✨
As a consumer, I feel the pinch. AC prices went up by thousands, and washing machines are also costlier. While the industry is growing, it's us who are paying the price for the heatwave and inflation. The government should reduce GST on cooling products to make them
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