MUMBAI: Driven by easy financing options and premiumisation drivers will boost the revenue of consumer durables manufacturers 11-12% this fiscal, continuing the healthy run after a strong 13% growth last fiscal, says a report.
Festive spending, along with strong growth in housing sales, should also support overall volumes, following strong demand for refrigeration products during the summer season this fiscal, Crisil Ratings said in a report on Friday.
Led by premiumisation, better operating leverage and stable raw material prices, operating margins will improve to 6.8-7% this fiscal, from 6.5% last fiscal, but will remain below pre-pandemic highs owing to intense competition.
While, total capex will remain similar to that incurred last fiscal, consumer durable makers will invest on introducing new features that offer differentiated value proposition to consumers. Strong cash generation and healthy liquid surplus will keep reliance on external debt low, supporting the credit profiles of players, notes the report based on the study of eight consumer durables makers, accounting for 55-60% market share in value terms.
As per Shounak Chakravarty, a director with the agency, increasing adoption of easy financing options like no-cost EMIs, credit card loans and buy-now-pay-later schemes are making high-value premium purchases more affordable and accessible. Loans under this category expected to grow 18-20% this fiscal, after having almost doubled over last four years.