India’s consumer durable makers to log 11-12 pc growth in FY25

New Delhi, Nov 21 (IANS) Revenue of consumer durable manufacturers in India is projected to rise 11-12 per cent this fiscal (FY25), continuing the healthy run after a strong 13 per cent growth last fiscal, according to a report on Thursday.A Crisil Ratings report said this will ride on rising adoption of consumer durable financing, which supports the trend of premiumisation, resulting in better realisations. Festive spending and strong growth in housing sales should support overall volumes, following strong demand for cooling products during the intense summer season this fiscal.Operating margin will improve to 6.8-7 per cent this fiscal, from 6.5 per cent last fiscal, driven by better operating leverage and stable raw material prices, but remain below pre-pandemic highs owing to intense competition.“While, total capital expenditure (capex) this fiscal, will remain similar to that incurred last fiscal, consumer durable makers will invest on introducing new features that offer differentiated value proposition to consumers,” the report mentioned.Strong cash generation and healthy liquid surplus will keep reliance on external debt low, supporting the credit profiles of players.According to Shounak Chakravarty, Director, CRISIL Ratings, increasing adoption of easy financing options such as no-cost equated monthly instalments (EMIs), credit card loans and buy-now-pay-later schemes are making high-value premium purchases more affordable and accessible.Loans under this category are expected to grow 18-20 per cent this fiscal, after having almost doubled over the last four years.“Increasing affordability, rising aspirations and changing lifestyles are also supporting the premiumisation trend which will drive revenue growth of 11-12 per cent for consumer durable sector this fiscal and next fiscal too,” he mentioned.Changes in buying patterns (stocking up on weekends) and growing availability of frozen food are also driving up demand for larger capacity refrigerators.The rising trend of weekend washing, because of the increasing proportion of working population, is driving sales of washing machines with higher capacity.In the television segment, narrowing gap between the costs of 55+ inch and 40 and 43-inch screens is driving demand for larger screen televisions, consequently helping players improve their average product realisations.Air conditioners and refrigerators did brisk sales owing to intense heat waves this summer.Further, festive demand coupled with a sharp 22 per cent uptick in housing sales over the past couple of years will also translate into higher demand for consumer durables this fiscal as new homeowners furnish their properties.Majority of the capex (Rs 1,800-2,000 crore) this fiscal will be done towards enhancing capabilities for developing new age IoT-enabled smart devices, said the report.--IANSna/

Yubaraj

Nov 21, 2024 - 08:08

New Delhi, Nov 21 (IANS) Revenue of consumer durable manufacturers in India is projected to rise 11-12 per cent this fiscal (FY25), continuing the healthy run after a strong 13 per cent growth last fiscal, according to a report on Thursday.

A Crisil Ratings report said this will ride on rising adoption of consumer durable financing, which supports the trend of premiumisation, resulting in better realisations. Festive spending and strong growth in housing sales should support overall volumes, following strong demand for cooling products during the intense summer season this fiscal.

Operating margin will improve to 6.8-7 per cent this fiscal, from 6.5 per cent last fiscal, driven by better operating leverage and stable raw material prices, but remain below pre-pandemic highs owing to intense competition.

“While, total capital expenditure (capex) this fiscal, will remain similar to that incurred last fiscal, consumer durable makers will invest on introducing new features that offer differentiated value proposition to consumers,” the report mentioned.

Strong cash generation and healthy liquid surplus will keep reliance on external debt low, supporting the credit profiles of players.

According to Shounak Chakravarty, Director, CRISIL Ratings, increasing adoption of easy financing options such as no-cost equated monthly instalments (EMIs), credit card loans and buy-now-pay-later schemes are making high-value premium purchases more affordable and accessible.

Loans under this category are expected to grow 18-20 per cent this fiscal, after having almost doubled over the last four years.

“Increasing affordability, rising aspirations and changing lifestyles are also supporting the premiumisation trend which will drive revenue growth of 11-12 per cent for consumer durable sector this fiscal and next fiscal too,” he mentioned.

Changes in buying patterns (stocking up on weekends) and growing availability of frozen food are also driving up demand for larger capacity refrigerators.

The rising trend of weekend washing, because of the increasing proportion of working population, is driving sales of washing machines with higher capacity.

In the television segment, narrowing gap between the costs of 55+ inch and 40 and 43-inch screens is driving demand for larger screen televisions, consequently helping players improve their average product realisations.

Air conditioners and refrigerators did brisk sales owing to intense heat waves this summer.

Further, festive demand coupled with a sharp 22 per cent uptick in housing sales over the past couple of years will also translate into higher demand for consumer durables this fiscal as new homeowners furnish their properties.

Majority of the capex (Rs 1,800-2,000 crore) this fiscal will be done towards enhancing capabilities for developing new age IoT-enabled smart devices, said the report.

--IANS

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