After muted start, GST cuts boost consumer durables demand in '25

‘The consumer durables industry had a year worth remembering.

- AKSHARA SRIVASTAVA

Even as 2025 started off slow with the summer season cut short by prolonged monsoon, slashing of the goods and services tax (GST) rates provided the industry the much-needed relief.

Cooling appliance makers had started the year with high hopes, but an early arrival of monsoon splashed away their enthusiasm.

For air conditioner (AC) major, Voltas, the year began on a positive note despite the high base of summer 2024. However, high temperatures were not reached in many parts of the country. This affected demand in the peak season.

“The year 2025 began with a great deal of optimism for us. As a cooling category player, we had delivered an exceptionally strong performance in 2024, so expectations were high... However, as we moved into April and May, the situation changed significantly. The summer was highly erratic, with intermittent rain,” Mukundan Menon, managing director (MD) at Voltas told Business Standard.

Menon said this caused a rise in inventory of raw materials and finished goods for companies.

He added, “I believe the worst is now behind us. Looking ahead, the outlook is much more positive. The upcoming summer, along with the GST trigger, should be supportive, and we are confident that business conditions will improve from here.”

For Bluestar, the inclement weather led to a degrowth in the June quarter.

“We saw 51 per cent growth in the first quarter last year and were expecting a 20-25 per cent increase on that base. However, there is an excess of almost two million air conditioner units in the market as dealers had bought more anticipating shortage. The inventory has piled up and we can expect a degrowth of 25-30 per cent this quarter,” said B Thiagarajan, MD, Bluestar.