New Delhi [India], January 4 (ANI): The consumer durables industry in the country is expected to witness weak growth in FY26 due to slowing consumption demand, according to a report by Nomura.
The report indicated that subdued demand trends across various sales channels, including general trade, modern retail, and e-commerce, are expected to persist in the near term.
The report noted that the industry survey highlighted that initial estimates for the third quarter of FY25 suggest a decline in housing sales, which could further impact demand for consumer durables.
“Given the slow consumption demand, we expect a weak trend to continue into FY26,” the report stated.
In FY25, the performance of the consumer durables industry has been uneven. Segments such as air conditioners and wires and cables (W&C) experienced strong growth, driven by pent-up demand and steady business-to-business (B2B) activity.
However, other categories like small appliances, lighting, refrigerators, and washing machines have struggled with subdued demand.
Looking ahead to FY26, the report forecasted that some normalization in the growth of the air conditioner segment, which has been a key driver of the industry this fiscal year. However, modest growth is expected in other categories, with no significant recovery anticipated.
It said “In FY26F, we expect some normalization in growth momentum in air conditioners, while other segments should see modest growth”.
Despite these challenges, the report points to a potential revival in EBITDA margins. This improvement could be supported by stable commodity prices, price hikes, operating leverage, and government-led production-linked incentive (PLI) schemes. However, these positive factors may be partially offset by the need for higher discounts to stimulate demand.
“We factor in some revival in EBITDA margins led by stable commodity, price hikes, operating leverage and production linked incentive (PLI) schemes, partly offset by higher discounts to drive growth” the report said.
The report highlights the mixed performance of the consumer durables industry in FY25 and highlights the ongoing challenges posed by weak consumption trends. With only modest recovery expected in FY26, the industry may need to rely on supportive government policies and strategic pricing to navigate the headwinds. (ANI)
