With the slow start to the winter, consumer durables and electrical companies have reported a sluggish demand for winter products like geysers and room heaters in November, post the festive season of Diwali. Lower demand has been attributed to weak demand particularly from the northern region where temperatures continued to be higher than normal. Moreover, per a report by YES Securities, Diwali saw satisfactory demand with high single digit growth led by RAC and refrigerators, while washing machines grew in mid-single digit.
The brokerage firm also noted that few brands took a token price increase of 1-2 per cent. Meanwhile, premium products continue to see higher traction on the back of no-costs EMI offered by the brands.
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Dealers expect demand to recover in the months of December and January as temperatures have started dropping from the last week of November and there has been positive momentum in the last 2-3 days of November. Channel inventory continues to be normalized as dealers and retailers are yet to place the orders for the summer products, which should start from December. On the electrical side, agri pumps continue to see strong growth with increasing demand for the solar pumps. The report said that dealers are optimistic that winter products inventory that they are carrying will be liquidated in the ensuing months as winter sets in, while dealers and distributors are very optimistic for the summer products and prospects of strong summer season given the IMD’s prediction of mild winter. “We continue to maintain our positive stance on the sector with demand continuing to trend better and increasing ASP with enhanced sales of the premium products. Havells, Crompton and Voltas will be our preferred pick from the electrical and durable space,” YES Securities said.
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Furthermore, per the report, large appliances have registered high single-digit to low double-digit growth led by higher demand for the premium products.
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