India's consumer durables makers have begun FY27 with cautious optimism, betting on stronger summer demand and early recovery after a challenging FY26. According to reports from Mint, Blue Star CFO Nikhil Sohoni expressed cautious optimism about FY27 prospects during the company's Q4 earnings call, while noting that rising input costs and volatile exchange rates would make margin management challenging. The optimism is supported by expectations of a stronger summer, helped by weak FY26 base effects and strong dealer-level sales in March-May, with Voltas reporting March as one of its highest-ever sales months.
The sector faced significant headwinds in FY26, with major companies reporting mixed results. As reported by Mint, Blue Star reported a 3.5% year-on-year rise in consolidated income to ₹12,463.9 crore, but net profit fell to ₹527.3 crore from ₹591.3 crore a year earlier. Voltas experienced a sharper slowdown, with total income falling to ₹14,483 crore from ₹15,737 crore in FY25, while net profit dropped to ₹370 crore from ₹834 crore. Havells India showed resilience with revenue rising 3.4% to ₹22,527.8 crore and consolidated net profit climbing 14.5% to nearly ₹1,690 crore, though its home appliances business Lloyd faced stress with revenue declining 23%.
Consumer durables makers face significant input cost inflation that limits pricing power, with costs escalating further. According to Mint reports, Havells India chairman Anil Rai Gupta noted unprecedented price escalation, stating he hadn't seen such steep increases across all product categories in recent past. Copper prices, a key imported input, hovered at $9,500 per tonne in May 2025, compared with $12,500 currently. The Bureau of Energy Efficiency tightened energy-efficiency standards in January, forcing AC makers to upgrade components and absorb higher costs alongside rising raw material prices. Blue Star implemented price hikes across categories averaging about 8%, though a cumulative increase of nearly 13% would have been required to fully offset rising commodity and currency costs.
The sector's outlook faces additional pressure from rising inflation, with economists warning of potential impacts on consumer demand. As reported by Financial Express, economists warn that a ₹3 per litre hike in petrol and diesel prices will lift India's retail inflation by 15 basis points, with cumulative increases potentially pushing FY27 CPI to 5%. India's wholesale inflation unexpectedly accelerated to 8.3% in April, its fastest pace in three-and-a-half years, driven by surging energy costs from West Asia conflict. This inflation, coupled with price hikes of staples and fuel, could affect discretionary purchases and impact replacement demand during the festive season.
Despite current challenges, the sector shows long-term growth potential. As reported by Mint, India's heating, ventilation and air-conditioning market is projected to grow about 15% annually, with residential air conditioner sales expected to reach 30 million units by 2030. The Indian Meteorological Department forecasts a harsher summer and below-normal monsoon amid emerging El Niño conditions, with heatwave conditions likely to intensify across large parts of north-west, central and western India. However, analysts remain cautious about margin recovery, with Motilal Oswal noting that variability in summer intensity and seasonal patterns may significantly impact sales momentum.
