With expectations of pent-up demand and kickstart of the upgradation cycle, fan makers are bullish about this summer season, which contributes nearly 45-50 per cent of the category’s annual sales.
While industry players expects the sector to get back to pre-pandemic levels after witnessing two washed-out summer seasons, inflationary pressures remain a challenge.
The mandatory energy efficiency norms for fans are also expected to get implemented in the second half of the year kicking off transition for fan companies and consumers. But the larger impact of this transition will be felt post the summer season, players pointed out.
Ravindra Singh Negi, President-Electrical Consumer Durables, Havells India Ltd, said, “While the industry is expected to clock growth in high single digits, as a company we expect to continue to clock higher growth levels than the industry. There is definitely a lot of optimism about good growth in this summer season. But we will need to watch out for inflationary pressures.”
Negi said that the company’s new product range focuses on meeting key demand trends of consumers including shift towards more technology-integrated products, aesthetic features as well as offering consumers star-rated energy efficient products.
“In the past couple of months, we have had to take a price hike of about 7-8 per cent for fans. Given the unrelenting unprecedented inflationary pressures, we may need to take another price hike to the tune of 5-6 per cent,” he added.
Industry players pointed out that all fan makers have increased prices by 6-7 per cent in this quarter and an another price hike could be inevitable in this summer season as commodity prices and logistics costs remain high.
Atul Jain, Executive Vice-President, Orient Electric Ltd said, “We expect the industry to get back to the pre-pandemic levels in this summer season after witnessing a decline in the past two years due to the pandemic. Inflationary pressures remain a headwind. The sector would have seen even better growth if these pressures were not there as strong demand trends are already visible.”
BEE star ratings
He added that the industry will be looking for more clarity on the much needed mandatory implementation of BEE star ratings norms for ceiling fans.
The norms were expected to come into force in 2020 but due to the pandemic the implementation was postponed They are likely to be implemented from July 1.
Rohit Mathur, President-Electric Fans, Water Heaters and Pumps, Usha International, added that pent-up demand and upgrade cycles will help the sector clock strong growth in this summer season.
“Having said that, the one thing that makes us all cautious is the global geo-political tensions that may lead to inflationary trends and price increases due to a sharp rise in commodity and fuel prices. While it’s too early to predict, we can only wait and watch to see how it really pans out and affects the demand and consumer sentiments in the coming months,” he added.
An analyst note by ICICI Securities stated that as per BEE rules and regulations, star ratings on fans will be implemented in second half of the calendar year 2022.