New Delhi: According to a recent analysis from Goldman Sachs, consumer durable firms in India are anticipated to experience modest growth in the first quarter of the financial year 2025-26 (April-June).
The study noted that the overall growth of consumer durables and electrical firms is expected to decrease in the current quarter.
It stated that consumer durables and electricals companies' growth would slow this quarter. While B2B categories have a more positive outlook.
While the business-to-business (B2B) segments are benefiting from strong government capital expenditure in April and ongoing work on major government-led projects such as PMKUSUM, RDSS, and Bharatnet, the business-to-consumer (B2C) segments are expected to experience slower growth during this period.
According to the report, B2C segment demand remains sluggish, and real estate-driven demand has yet to recover. This is particularly evident in cooling products such as air conditioners and refrigerators, which have had lower sales.
As a result, the total growth projections for consumer durable firms have been revised downward for this quarter.
Goldman Sachs also mentioned that, while some favorable macroeconomic elements such as decreased inflation, tax cuts, and favorable interest rates exist, their influence on demand and consumer sentiment is expected to be felt only in the second part of FY26.
The study also noted that firms are experiencing margin pressures due to negative operating leverage, which means that their fixed costs stay high while revenue growth is insufficient to compensate for them.
However, lower raw material costs and targeted price rises in items are helping to offset some of the margin pressure.
Copper and aluminum prices have risen month over month in May and June. This may result in some restocking by firms.
However, since copper prices remain low on a year-on-year basis, the majority of the increase in total revenue is expected to be driven by volume. The report anticipates volume increase in the midteens range.
