Volume vault will increase consumer durables sector revenue by 15-18%, says CRISIL

Revenue from the consumer durables sector in India is expected to grow by 15-18% to Rs 1 lakh crore in the current financial year on the back of a 10-13% increase in volume, CRISIL said in a statement. .

Despite pressure on margins, credit risk profiles are comfortable due to balance sheet strength.

Demand will be driven by both urban and rural segments, although rural demand will come into play in the second half of the fiscal year. For the record, the industry had passed the pre-pandemic bar in terms of value last fiscal year; this fiscal year, it will exceed the pre-pandemic volume threshold of 3%.

“Over the past two years, the disruptions caused by the pandemic have impacted consumer sentiment and peak season demand. This healthy fiscal growth in urban incomes and higher crop prices, which should support incomes from farmers, will drive demand for consumer durables Shorter replacement cycles, rising trade, increased penetration of finance and changing weather conditions will support volume growth of 10-13%” , said Pushan Sharma, director of CRISIL Research.

Profitability will decrease slightly due to higher raw material prices and unfavorable exchange rate fluctuations.

However, players’ credit risk profiles will remain comfortable due to their strong balance sheets, as evidenced by low leverage and healthy liquidity.

A CRISIL analysis of eight companies that account for half of the sector’s revenues indicates this.

“Players’ ability to raise prices has been limited due to fragile demand during the pandemic. This had an impact on profitability, which should return to normal next year. stable,” said Anand Kulkarni, director of CRISIL Ratings.



(Only the title and image of this report may have been edited by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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