White goods have seen a better-than-expected recovery in demand, according to a Q2 preview report by Emkay Global Financial Services.
Even after the initial pent-up demand in June following the relaxations in the COVID-19 pandemic-induced lockdown, demand for white goods continues, said the report.
According to the report, sales of washing machines and refrigerators saw better traction in August and September, while there was a moderation in room air conditioner sales due to seasonality.
A strong double-digit demand was seen in fans, wires, and small appliances, with retail lighting reaching close to last year's levels, the report added.
Moneycontrol had reported how there is a spurt in purchase of appliances online ever since the lockdown was eased. Though physical stores have opened up completely since August, customers have opted for online buying.
“Stable revenue, lower ad spends should lead to double-digit EBITDA growth for Havells, Crompton, Whirlpool and Dixon,” said the report.
Havells, Crompton and Whirlpool are consumer durables firms, while Dixon is into contract manufacturing of appliances.
Among the white goods firms, the Emkay report said, Whirlpool's revenue is expected to increase on the back of growth in higher washing machine and refrigerator sales.
It added that Whirlpool has gained market share in refrigerators and maintained its share in washing machines.
Crompton Greaves Consumer on the other hand, is expected to see a double-digit growth in the September quarter in the fans category. However, the report added that air coolers and pumps would have grown at a slower pace.
According to Emkay, when it comes to Havells, the consumer durables segment will see growth on the back of segments like fans, water heaters and kitchen appliances.
For Dixon, Emkay estimates that the television segment is likely to see strong performance (14.8 percent growth) on strong demand for large-screen smart TVs.
The report added that growth in the TV segment would have been higher had there not been a disruption in imports from China in July.
Washing machines are expected to clock 6.8 percent growth in the second quarter as demand increased after the easing of lockdown restrictions.
Industry estimates showed that the appliance industry lost close to Rs 7,000 crore of sales due to the complete lockdown in April, May and part of June.
However, the expectation is that the sales will pick up during the festive season starting October, which will reflect in the December quarter revenues.
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