Near-term concerns to hit cooling products

Outlook for listed consumer durables majors may stay muted

- RAM PRASAD SAHU

After a weak September quarter, the near-term outlook for listed consumer durables majors in the cooling products space is expected to be muted. This is given the surge in commodity prices, high inventory and ongoing advertising spends.

Barring a couple of exceptions, most companies reported a sharp fall in sales growth over the year-ago quarter. The only saving grace for listed companies is that valuations are reasonable and could be a factor if there is a pick up in demand during the next summer season. The decline was led by the air conditioner segment with key listed players reporting a revenue fall of 10-23 per cent. The drop was on account of high channel inventory and goods and services tax (GST) transition period which led to deferment of purchases.

Achal Lohade of Nuvama Research said, “Large and small appliances posted one of the worst Q2 results. The demand scenario continues to be tough in general, although low inflation and a robust monsoon are keeping medium-term recovery hopes alive.”