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India’s consumer durables sector, particularly air conditioners, faced a challenging Q4FY26 with sales volumes negatively impacted by increased input costs from geopolitical conflicts in West Asia and unseasonal March rains.
Key Points
- Geopolitical conflict in West Asia and unseasonal March rains significantly impacted consumer durables volumes, especially ACs, in Q4FY26.
- Despite price hikes to offset rising input costs like copper, further increases are needed to fully absorb inflation, leading to projected declines in EBITDA and APAT.
- Cooling categories experienced muted demand due to a high base, unseasonal weather, and delayed summer, while televisions and kitchen appliances showed stronger growth.
- Analysts forecast overall 7 per cent revenue growth for the consumer durables sector, but EBITDA is expected to decline by 5 per cent and APAT by 16 per cent year-on-year.
Increased input costs, due to the geopolitical conflict in West Asia and unseasonal rain caused by western disturbances in March negatively impacted volumes of consumer durables makers, especially air conditioners (ACs), in the fourth quarter of 2025-26 (Q4FY26).
Ahead of a crucial summer season, especially for AC sales, the rise in price of copper and revised energy efficiency ratings could offset the impact of goods and services tax (GST) rate revisions announced in September.
Impact on Consumer Demand
“Demand remained subdued across most consumer durables categories in the quarter. Cooling categories (room ACs, coolers and fans) were muted due to a high base, unseasonal rain in the north, and delayed summer in the south,” stated analysts at HDFC Securities in a note earlier this week.
While televisions are expected to witness strong growth, supported by demand led by the ICC Men’s T20 World Cup, kitchen appliances may post healthy growth, driven by rising induction cooktop adoption amid gas shortages due to the West Asia crisis.
Washing machines, refrigerators, and water purifiers are expected to showcase a decent performance.
Financial Projections and Market Performance
“Companies implemented price hikes in the quarter to pass through cost pressures; however, further increases are required to fully absorb input cost inflation.
“Overall, we forecast 7 per cent revenue growth for the consumer durables universe.
“However, EBITDA (earnings before interest, tax, depreciation and amortisation) and APAT (adjusted profit after tax) are projected to decline by 5 per cent and 16 per cent year-on-year respectively, due to commodity cost pressures,” they added.
Sales of large appliances remained under stress during the entire quarter.
“According to our channel checks, RAC (room AC) sales in January/February grew well on a strong base but were weak in March due to unseasonal rains in parts of the country,” noted analysts at Kotak Institutional Equities.
“While the northern region fared better than the South… We expect 8 per cent and 5 per cent Y-o-Y revenue growth in Blue Star and Voltas, respectively, flat growth in LG, and 10 per cent decline in Lloyd in Q4,” they added.
