See good growth in consumer durables in Aug-Oct: Videocon

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See good growth in consumer durables in Aug-Oct: Videocon

Industrial output numbers for June has beaten street expectations coming in at 8.8%. However, the growth of 1.3% in consumer durables is very poor compared to 5.2% the last month.

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Industrial output numbers for June has beaten street expectations coming in at 8.8%. However, the growth of 1.3% in consumer durables is very poor compared to 5.2% the last month.

Venugopal Dhoot, chairman and managing director of Videocon says that this number is disappointing, but things will improve. "I don't think demand will go down further because people are holding money. Even those who are at the bottom of pyramid have got money" he told CNBC-TV18 in an exclusive interview. "From August-October onwards, you will see a very big growth to come in the consumer durable industry" he added.

Below is an edited transcript of his interview with Latha Venkatesh and Sonia Shenoy. Also watch the accompanying video.

Q: What did you make of this key 8.8% number for IIP?

A: The IIP number is quite satisfactory; capital goods have gone up, basic goods have gone up. The question is why the consumer durable industry has not gone up? In 2009 and 2010, there was a robust growth in consumer durable industry, with average growth around 20% for two years. So a correction has to take place.

Another reason is because manufactures do not keep stock nowadays. They produce it when needed because they do not know what will happen in the future. Apart from that, capital good investment in the consumer durable industry has not taken place. So the exports have reduced. We were interested in exporting the goods, but the global market is sluggish so that part of manufacturing has also gone down.

Q: You are not too worried that this will progress into the next couple of months as well?

A: I don't think the demand will go down because people are holding money. Even those who are at the bottom of pyramid have got money.

Q: The anecdotal experience in your own retail shops, were June -July bad months?

A: Not that bad. We cannot get those numbers which we have got in 2009-2010, when the market was jubilant and customers wanted to buy. Consolidation is taking place now so the number may not be too high. From August-October onwards, you will see a very big growth to come in the consumer durable industry.