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Virendra Verma

Higher disposable incomes and easy financing options are contributing to the demand for consumer durables.

Mumbai , Dec. 3

CONSUMER durable stocks have been attracting buying interest in the last month following good monsoon and a possible rise in disposable income, especially of farmers.

The interest in the consumer durable stocks is seen from the BSE Consumer Durable Index, which has provided returns of 26.50 per cent in the last month, rising from 956.46 on November 3 to Wednesday's closing of 1,210. In comparison, the BSE Health Care Index has gained only 9.76 per cent, the BSE Capital Good Index 11.05 per cent and BSE IT Index 10.27 per cent. During this period, the broader index, BSE 500, gained 7.37 per cent and BSE 100 4.94 per cent.

Some of the companies that form part of the BSE Consumer Durable index are Titan Industries, Videocon International, Mirc Electronics, Whirlpool India and Electrolux Kelvinator.

According to analysts, the interest in the consumer durable stocks has mainly come following the good monsoon and increased sales during the festival season.

Mr V.K. Sharma, Head of Research, Anagram Stock Broking, said, "Crop production this year has been good. But there was no fall in the prices as was seen in the past. With higher disposable incomes this year, the demand for consumer durables would increase."

He said there is increase in spending on consumer durables across the country and the impact of this would be seen in the third-quarter results of various consumer durable companies.

Mr Nikhil Vora, Senior Vice-President at SSKI, said, "The demand for consumer durables has been good due to the shorter product life cycle." He said earlier, consumers were disposing of their durables after 12-15 years; this period has now come down to 8 years.

Mr Vora said the feel-good factor of the monsoon has also brought interest in these stocks.

Other analysts said the demand for consumer durables is also increasing due to easy financing options.

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