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Consumer Durables Face Margin Squeeze Amid Rising Costs, Soft Demand

The consumer durable industry is expected to post modest sales growth of 9% year-on-year for Q4FY26, reaching Rs 480 billion. However, profitability is under severe pressure with EBITDA margins forecast to contract by 130 basis points due to rising commodity costs. Regulatory changes for products like air conditioners and refrigerators are creating additional pricing challenges despite attempted price hikes. The sector faces a complex environment of elevated input costs, rupee depreciation, and moderated demand, leading to an anticipated decline in profit after tax.

Key Points: Consumer Durables Q4 Earnings Under Pressure: Centrum

  • 9% YoY sales growth expected
  • EBITDA margin to fall 130 basis points
  • Rising copper, aluminium costs pressure margins
  • Regulatory changes add pricing pressure for ACs, fans
2 min read

Rising costs, subdued demand to pressure Consumer Durable Industry earnings: Centrum

Centrum report forecasts 9% sales growth but margin decline for consumer durables in Q4FY26 due to rising input costs and subdued demand.

"EBITDA margin is likely to fall 130 bps YoY to 9.5%, leading to 6% YoY de-growth in PAT - Centrum Report"

New Delhi, April 9

The consumer durable industry is navigating a challenging period where top-line growth is likely to be offset by thinning margins and regulatory shifts. Q4FY26 is expected to be a soft quarter for the sector, due to modest demand and rising input costs, noted a report by Centrum.

The report estimated that the sector will see a 9 per cent year-on-year sales growth, reaching Rs 480 billion for the quarter. "For Q4FY26, we expect our coverage universe to see 9% YoY sales growth at Rs 480 bn while EBITDA margin is likely to fall 130 bps YoY to 9.5%, leading to 6% YoY de-growth in PAT at Rs 31 bn," the report stated.

On the margin front, the sector is likely to see "elevated pricing pressure due to rising commodity costs, specifically in copper, aluminium, PVC, and resins." These pressures are further compounded by the depreciation of the rupee and logistical hurdles such as higher ocean freight and increased competition from imports. Additionally, the report mentioned that categories like air conditioners, fans, and refrigerators are facing specific headwinds following regulatory changes.

"Categories which has seen BEE norm changes (AC, Fan, Refrigerator, etc.) from 1st Jan 2026 would see additional pricing pressure despite taking price hikes," the report noted.

The Cable and Wire category, which previously delivered strong volume growth, has also seen a moderation to low single-digit volumes. While realization growth in this segment remains in the mid-teens due to higher copper and aluminium prices, the overall volume slowdown in February and March 2026 was driven by channel de-stocking and the deferment of various projects.

"On margin front, the sector is likely to see elevated pricing pressure due to rising commodity costs (copper, aluminium, PVC, resins), rupee depreciation and increased challenges like imports and higher ocean freight," the report added.

While premiumization continues to drive early double-digit growth in washing machines and televisions, the broader industry remains cautious. The report stated, "Another round of price hikes are expected in April month to offset rise in PVC, resins prices and rupee depreciation."

- ANI

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Reader Comments

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Priyanka N
As someone who works in manufacturing, I see this firsthand. The rupee depreciation hits us hard because we import a lot of components. The government needs to focus more on boosting local production of things like copper and resins to reduce this import dependency. "Make in India" needs a stronger push in electronics.
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Aman W
The report is spot on about subdued demand. In my circle, everyone is postponing big purchases. Salaries haven't risen as fast as prices. Only premium products are selling? That shows the growing inequality - a small section can afford upgrades, while the majority is struggling with basics.
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Sarah B
While the margin pressure is real, I respectfully think the industry could be more innovative. Instead of just passing costs to consumers, can we see more durable, repairable products? The constant cycle of buying new fridges and TVs every few years isn't sustainable, environmentally or economically.
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Karthik V
The cable and wire segment slowdown is a big red flag for the real estate and infrastructure projects. If projects are getting deferred, it points to a broader economic cooling. Hope this is just a temporary phase of channel adjustment and not a long-term trend. 🏗️
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Meera T
Festive season sales later this year will be the real test. Companies will offer big discounts to clear inventory. My advice to buyers: wait for Diwali or Amazon Great Indian Festival if you can. You'll get the new BEE 2026 models at much better prices. Patience pays!

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