Consumer durables are expected to experience a sharp increase in demand as India prepares for record high temperatures this summer, supporting a strong economy. The India Meteorological Department (IMD) has forecasted above-average maximum temperatures from April to June, along with an increase in heatwave days in certain parts of the nation.

Market Landscape:

Fast-Moving Consumer Goods (FMCG) and Consumer Durables Sectors:

• Optimism: Major players are optimistic about a resurgence in sales following last year’s subdued performance due to unseasonal rains.
• Rapid Disappearance: Essential commodities such as air conditioners, refrigerators, and fans are rapidly disappearing from store shelves, signaling a bustling market landscape.

Financial Highlights:

Voltage:

• Impressive Growth: Reported an impressive 30 percent year-on-year revenue growth in Q3FY24, totaling Rs 2,625.72 crore.
• Record High: Substantial increase in air conditioner sales, with over 2 million units sold in FY24 alone, marking a record high for AC sales in India.

Blue Star:

• Revenue Surge: Witnessed a remarkable 25% revenue surge during the same period.
• Anticipated Growth: Expects a 25% increase in residential AC sales in Q1FY25, the peak season for such purchases.

Industry Insights:

Thiagarajan’s Perspective:

• Commercial Refrigeration Market: Anticipates the Indian commercial refrigeration market to double to Rs 10,000 crore within four years.
• Integrated Cold Chain Infrastructure: Emphasized the crucial role of integrated cold chain infrastructure in driving the growth of commercial refrigeration.
• Summer Season Significance: Likened the upcoming summer season to Diwali in terms of sales, expressing optimism about predictions of harsh weather conditions and robust demand.

Factors Driving Growth:

• Aspirational Middle Class: Growth largely driven by an aspirational middle class, with significant penetration levels observed in tier 3, 4, and 5 towns.
• Monsoon Outlook: Emphasized the importance of a favorable monsoon outlook, particularly for rural consumption, which significantly influences festival season sales.
• Government Initiatives: The government’s Production Linked Incentive (PLI) scheme for white goods, initiated in November 2021, has played a pivotal role in boosting domestic manufacturing.

Government’s Role:

• PLI Scheme: 42 companies selected under the scheme, with investments totaling Rs 4,614 crore to enhance AC and LED component manufacturing, significantly increasing domestic value addition for air conditioners.

Outlook:

• Sustained Growth: Industry experts anticipate sustained growth in the consumer durables sector, propelled by favorable weather conditions and government incentives.
• Promising Trajectory: The summer unfolds a promising trajectory for the industry in the foreseeable future.