Consumer durables shares jumped 2.01% to 37,957.50 on Tuesday, rebounding after declining in the previous trading session. The sector's strong performance came as the broader market showed mixed signals, with the S&P BSE Sensex declining 585.92 points or 0.76% to 77,091.46 and the Nifty 50 falling 183.45 points or 0.77% to 24,067.55 at 12:25 IST. However, the BSE 150 MidCap Index rose 1.48% and the BSE 250 SmallCap Index jumped 1.64%, indicating strong market breadth with 2,878 shares rising against 1,086 declining on the BSE. The NSE's India VIX tumbled 10.43% to 13.15, reflecting improved market sentiment and reduced volatility expectations.
India's consumer durables sector is positioned for one of its strongest quarterly performances in recent years, with analysts expecting over 20% year-on-year revenue growth in Q1FY27. As reported by The Times of India, the scorching summer has spurred demand for seasonal appliances, with air conditioners emerging as the biggest beneficiaries while washing machines, televisions, fans and kitchen appliances are also expected to post double-digit growth. Demand for summer-led categories gathered momentum from mid-April, peaked in May before moderating in June, helping companies offset last year's sluggish sales when the year-ago quarter was washed out due to heavy rains. The sector's robust performance is being aided by a strong summer demand and a favourable base after last year's unusually weak comparable quarter.
Kalyan Jewellers India led the sector gains with a 16.48% surge, followed by Dixon Technologies (India) at 4.99%, PG Electroplast at 2.97%, Amber Enterprises India at 2.44%, and Kajaria Ceramics at 2.07%. Other notable gainers included Blue Star (up 1.99%), Whirlpool of India (up 1.24%), Bata India (up 1.02%), LG Electronics India (up 0.9%) and Crompton Greaves Consumer Electricals (up 0.89%). According to reports from PL Capital Group, the brokerage has identified LG Electronics India and Amber Enterprises as its top picks for the June quarter, with LG remaining the preferred choice in the consumer durables space. PL Capital's Praveen Sahay, Lead Research Analyst for Consumer Durables, Building Materials & EMS, expects LG India to sustain revenue and EBITDA expansion over the coming quarters as earlier price hikes begin to reflect in earnings.
As reported by PL Capital, the extended summer season has led to improvement in demand for summer portfolio products, with industry retail sales expected to grow in strong double digits during Q1FY27. LG Electronics India has already implemented price hikes of around 14% in air conditioners, along with increases across refrigerators, washing machines and televisions, which should support revenue growth of 12-13% and EBITDA growth of around 20%. Voltas is estimated to report sales growth of around 30% by volume, while Blue Star could report 20-25% growth. However, both companies could face pressure on margins as competitive pricing limits their ability to pass on higher costs. The Times of India reports that Q1 of FY27 has delivered encouraging results, with the AC segment emerging as a standout performer, with LG Electronics director Sanjay Chitkara confirming this trend.
According to PL Capital's estimates, the firm projects revenue and EBITDA growth of around 21% and 25% respectively for its consumer durables coverage, while EMS companies are expected to post revenue growth of around 14%. Among listed companies in their coverage universe, PL Capital's preferred picks are LG Electronics India and Amber Enterprises, citing pricing power, diversification and improving earnings visibility over the next few years. The brokerage expects LG Electronics India, Dixon Technologies and Nykaa to outperform expectations in Q1, while Kaynes Technology could disappoint due to slower growth in its smart meter business. This selective approach reflects confidence in specific companies' ability to navigate current market challenges while capitalizing on favorable industry conditions, with the digital businesses and EMS sector expected to drive overall market performance despite margin pressures in other segments.
