Why investors shouldn't try buying troubled consumer durable stocks on dips

To be fair, consumer durable companies had defied slowdown till December 2019. But, with revenues projected to dip by 5 - 9 per cent in Q4, it will pull down FY20 earnings.

The nationwide lockdown will snatch away two good quarters from white goods manufactures. For companies, such as Voltas, Blue Star, Havells, Whirlpool, and Crompton Greaves Consumer Electricals, the March and June quarters are the most critical and active periods, accounting for 50–55 per cent of annual revenues. Air conditioner makers, in particular, draw 42–45 per cent of their revenues during March-June, according to brokerage Nirmal Bang.

Given the criticality of summer season sales, any effort to bump up operating margins through a price hike or a reduction in distribution commission turns out to be most successful during these quarters.