New Delhi [India], June 20 : Consumer durable companies in India are expected to report moderate growth in the first quarter of the financial year 2025-26 (April-June), according to a recent report by Goldman Sachs.
The report mentioned that the overall growth for consumer durables and electrical companies is likely to slow down in the current quarter.
It stated "We expect consumer durables and electricals companies' growth to moderate this quarter. While B2B categories have a better outlook".
While the business-to-business (B2B) categories are performing better due to strong government capital expenditure in April and continued work on major government-led projects like PM-KUSUM, RDSS, and Bharatnet, the business-to-consumer (B2C) categories are expected to see slower growth during this period.
According to the report, demand from B2C segments is still weak, and the real estate-driven demand has not yet picked up. This is especially visible in the cooling products category like air-conditioners and refrigerators, where sales have been on the lower side.
As a result, the overall growth expectations for companies covered under consumer durables have come down for this quarter.
Goldman Sachs added that although some positive macroeconomic factors like lower inflation, tax cuts, and favourable interest rates are present, their impact on demand and consumer sentiment is likely to be seen only in the second half of FY26.
The report also highlighted that companies are facing margin pressures due to negative operating leverage, which means their fixed costs remain high while revenue growth is not strong enough to offset them.
However, this margin pressure is being partially managed by lower commodity prices and selective price increases in products.
In terms of raw material prices, copper and aluminium have seen a month-on-month increase in May and June. This may lead to some restocking by companies.
However, since copper prices are still down on a year-on-year basis, the overall revenue growth is likely to be driven mostly by volume. The report expects volume growth in the mid-teens range.
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