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Consumer durables companies' Q4 performance dampened by unseasonal rain

Industrial demand buoyant during Jan-March period

consumer durables firms

Even Voltas witnessed better commercial demand in the commercial refrigeration category as it saw higher sales in water coolers, water dispensers and visi coolers

Sharleen Dsouza Mumbai

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Unseasonal rain in the second half of March impacted consumer durables companies’ performance during the January-March (Q4) quarter, leading to a stock pile-up in the supply chain. However, companies said that industrial or business-to-business (B2B) demand was robust during the quarter.

“It's been a moderate performance, given that we had a subdued consumer demand, but also buoyed by a good industrial-inspired demand,” Anil Rai Gupta, chairman and managing director of Havells India told investors, after its quarter ended March earnings. He added, “We are witnessing a delayed summer, which may impact the demand for summer products this season.” 

Havells India also saw sustained and steady demand in the B2B segment as infrastructure and housing activities witnessed a revival in the second half. During the quarter, Havells India’s net sales stood at Rs 4,859.2 crore, up 9.8 per cent compared to the same period last year. 

Anand Rathi said that the near-term outlook (for Havells) looks constrained amid volatile commodity prices, which squeezed demand.

“Voltas also witnessed high-channel inventory in the quarter and the company attributed it to the rainfall in late March,” Manish Desai, head of corporate finance at the company told investors post its January-March results. 

Desai also told investors, “If we just look at the point in time at the end of March, there is a possibility that in certain channel partners, the inventories were stuck.” 

Even Voltas witnessed better commercial demand in the commercial refrigeration category as it saw higher sales in water coolers, water dispensers and visi coolers. 

It expects this demand to continue due to rapid organisation, change in dietary preferences, demand for frozen foods and market expansion by the original equipment manufacturers (OEMs) of ice creams, chocolates and beverages.

Contract manufacturer Dixon Technologies also said it saw a mixed bag as the order book was flattish during the last quarter of the previous financial year. But the company expects demand to revive in the coming months as orders will start pouring in ahead of the festive season.

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“I find the demand in consumer electronics and lighting to be slightly flattish, but fortunately in the last two weeks, I'm seeing an element of positivity and things turning around. And in any case, from next quarter, we are trading towards a festive period,” Atul Lall, managing director (MD) at Dixon Technologies told investors.

Nuvama Institutional Equities said in its post results report on the firm that despite a delay in signing two clients in the mobile division, the company is confident of doubling mobile revenue from Rs 4,000 crore to Rs 8,000 crore in FY24. The brokerage also said that structural drivers such as strategic price hikes and cost optimisation should not only sustain, but also improve margins in FY24 and FY25. 

However, Blue Star witnessed a strong quarter, and in January-March, it saw its net sales rise 16.4 per cent at Rs 2,623.8 crore while its net profit was up significantly at Rs 225.3 crore.

Nuvama said in its report on Whirlpool of India that its business has shown no green shoots of recovery coupled with weak demand for refrigerators and intense competition. The brokerage also said the company took price cuts to fend off weak demand. This resulted in margin pressure despite lower commodity costs.

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First Published: May 31 2023 | 9:42 PM IST

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