The second quarter of the current financial year saw better than expected demand recovery aided by the opening up of the economy. There was continued demand for white goods during the second quarter, in great contrast to the slump in demand during the April-June quarter, which was caused by the prolonged lockdown.
The sale of washing machines and refrigerators saw better traction in August and September. There was also improved sales during the festive season of Onam and Independence Day. At the same time, strong double digit demand was seen in fans, wires and small appliances, as per a report by Emkay Global Financial Services.
“There was continued strong rural demand and a price increase was seen in cables and wires and LED bulbs. At the same time, commodity prices, which were benign for the past couple of quarters, saw a sharp increase, while the rupee appreciated 2 per cent quarter-on-quarter. We expect stable revenue, lower advertisement spends and other selling, general and administrative expenses (SG&A) costs should lead to double digit EBITDA growth for companies such as Havells, Crompton, Whirlpool and Dixon,” said Naval Seth, Equity Analyst at Emkay Global Financial Services.
He, though, expects consumer electrical companies under their coverage to post flat revenues year-on-year (y-o-y). The Emkay report also points out that switchgears and lighting is also expected to see double digit declines. At the same time, Voltas is expected to report growth, despite a higher base, while Dixon’s revenues are expected to be flat y-o-y.
Consumer electronics giant Whirlpool is expected to see 6 per cent revenue growth. Whirlpool is expected to see revenue growth on the back of growth in washing machines and refrigerators as the brand has gained market share in refrigerators and maintained its share in washing machines. Distribution reach and new product launches in refrigerators have helped Whirlpool in gaining market share in refrigerators.
Many electronics and consumer durable brands are expecting good revival in sales going forward during the festive season. For instance, Panasonic India recently launched its 'New Dreams New Celebrations'. During this season, Panasonic has introduced offers and promotions on all its electronics, home appliances, beauty and lifestyle products. These offers are available at all authorised Panasonic touch points across the country, till November 20, 2020.
“The festival season began with Onam on a positive note signaling a return of consumer demand. We believe this will continue to remain the trend for the upcoming festive season. We are hopeful that the festive season will help recover the deficit incurred in the last few months due to the pandemic,” remarked Suguru Takamatsu, Divisional Head—Consumers Sales Division, Panasonic India.
Similarly, consumer durable brand LG Electronics has launched Khwahishon se Khushiyo Tak lucky draw offer that will last the festive season.
