Demand for consumer durables in the rural market remained impacted and weak during the first quarter f FY24. The delayed monsoon could further impact recovery in demand in rural areas.

According to Axis Securities Equity Research, the overall demand from consumers remained tepid during the quarter due to uneven weather conditions and unseasonal rains during the summer seasons.

Dealer discounts

“Seasonal products such as fans, coolers and ACs witnessed lacklustre demand in April as well as in May while some demand uptick was seen in June. Dealers resorted to discounts to clear inventory. Other categories such as refrigerators, washing machines, and lighting (B2C) witnessed muted demand environment, Leaders in their respective categories sustained their market shares during the quarter on account of their strong supply chains along with distributors and channel partners pushing inventory. The unorganised players are experiencing relief on account of softening of commodity prices,” mentions the result preview. 

An uptick in the business-to-business and business-to-government in the lighting segment was witnessed with strong growth and volume uptick as commodity prices softened. 

During the quarter, original equipment manufacturers did not implement any price hikes due to inventory build-up as they anticipated demand during summer and competitive prices from other companies.

While the demand for entry-level products was moderate, premium products and mid-premium products continued to gain traction in the quarter. 

“We would watch out for management commentaries on demand trends in rural and urban markets, channel inventory in the system, market share gains vs unorganised players, and updates on production under the PLI schemes. We would also closely monitor commentary on international subsidiaries and their performance as well as export opportunities,” said the quarter preview. 

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