Seasonal demand uptick critical for consumer electrical firms

Players with a diversified portfolio such as Havells are better placed compared to pure AC players given near term uncertainties

With the start of the summer season, stocks of consumer electrical companies are in focus and the S&P BSE Consumer Durables index is trading near its 52-week highs. Companies such as Havells, Voltas, Crompton Consumer Electrical, Symphony and Johnson Controls-Hitachi are trading close to their six months highs. Expectations are that a strong summer season will lead to significant pickup in their sales after the disappointment in FY19 that saw volumes impacted by unfavourable weather conditions and festive season sales too were muted.

The onset of summers in South India has been a trigger with various channel checks by brokerage