White goods to see price corrections

With the increase in commodity prices and inflationary pressures, the white goods industry is likely to witness price corrections.

Industry insiders state that while commodity prices are hardening, price corrections are not expected to be steep. Further, the industry is witnessing an uptick in demand for consumer durable products with the ongoing wedding season.

“This year, the consumer appliances industry faced challenges marked by reduced demand in rural areas, unusual weather, and economic strains. Despite these hurdles, we’re optimistic about a demand rebound over the coming quarters. Moderate Inflationary pressures and escalating commodity prices mean we might be looking at a potential price adjustment, but high inflation might even lead to a slight tapering of the demand in the kitchen appliances and the home appliances segments,” said Salil Kapoor, Chief Executive Officer of Hindware Home Innovation Limited.

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Unseasonal rains during March and April had impacted the sales of cooling products this year, while premium products across categories registered robust demand.

“The trend in commodity prices is fluctuating. It is in a range of about 15 to 16 per cent higher than the base of December 2020. The industry has already undertaken price hikes on product segments on the base of 2020, I don’t see a price hike shortly. However, if there is further hardening of commodity prices and rupee depreciation, we will need to evaluate,” said Kamal Nandi, Business Head and Executive Vice President – of Godrej Appliances, a part of Godrej & Boyce to businessline.

“The Q3 performance is expected to be better given the shifting of the festivities in Q3, while there is a good number of weddings clustered starting in November, estimated to be around ₹38 lakh against around ₹32 lakh last year. This should drive demand for the consumer durable space and remains a positive ahead,” said Avinash Pathak, senior research analyst at LKP securities.

Easy financing

To increase sales, consumer durable makers introduced easy financing options for consumers.

“Industry is expected to optimise costs and stay competitive with better availability of consumer finance to reduce the burden on the consumer. We have introduced multiple easy EMI options to make purchases convenient. Our consumer-friendly initiatives like instant cashback, zero down payment, easy and long-term EMI options, and extended warranties on select products are helping consumers make smart choices,” said a Voltas spokesperson.