Consumer durables industry awaits Budget measures to boost demand

Polycab India, Dixon Technologies, and Amber Enterprises could benefit significantly from government incentives.

Consumer durable firms are looking forward to the upcoming Budget with hopes that it will include measures to reduce imports, extend Production Linked Incentive (PLI) schemes, and implement policies to boost domestic manufacturing.

Firms like Cera Sanityware, Amber Enterprises and Crompton Greaves were the top consumer durable winners on the Nifty Consumer Durables index.

Analysts predict that a key focus of the Budget will be enhancing rural income, which would indirectly stimulate demand for consumer durables. The industry believes that varying tax rates and an expanded PLI scheme could enhance local manufacturing, attract investments, drive innovation, and create jobs.

Additionally, offering incentives based on total revenue and reducing corporate taxes would foster business growth.

Currently, there is a PLI scheme for white goods, with the government investing Rs 6,962 crore in 66 beneficiaries under the PLIWG. There is potential for a new scheme to include more consumer durables beyond ACs and LED lights. This expansion could lead to new jobs, manufacturing units, and increased logistics, according to Balasubramanian A from TeamLease Services.

Balasubramanian also mentioned that infrastructure development, a focus on rural areas, and social sector spending could significantly boost the penetration of consumer durables in rural markets. This could potentially double the market size within five years and create substantial job opportunities in rural retail and service sectors such as installation and repair.

Simplified compliance, emphasis on research and development (R&D), and efficient supply chain management are essential for the consumer durables sector's success. Elara Securities suggests that reducing import duties on components like compressors and semiconductors would lower production costs, making final products more affordable for consumers and boosting demand.

Companies like Polycab India, Dixon Technologies, and Amber Enterprises could benefit significantly from government incentives aimed at manufacturing and electronics production, as noted by Bonanza Portfolio.

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