With the onset of the summer season, the demand for cooling appliances, such as air conditioners, refrigerators, and fans, has shot up and thus prices are eight percent higher than last year.
“Pricing wise, over last season, we are nearly around 7-8 percent more,” said Nilesh Gupta, Director at Vijay Sales.
The pick-up in prices augurs well for the sector, which struggled post the COVID-19 pandemic because of supply hassles and semi-conductor shortages.
“Till a week back, everybody thought that this time the summer season is a washout but now since the last week, summer has once again come with a big vengeance and we have seen sales coming up. If the summer becomes more intense, we may be able to recover or there may be slightly more sales than expected,” Gupta explained.
Vijay Sales expects to see a correction in inventory in the first week of May.
“Corrections of inventory will not happen now. It will happen post-May 10 as that is the time when retailers and distributors will start cutting down inventories if they feel the season is not going as it is,” said Gupta.
The price rise is not a major worry for the consumers as 80 percent of the sale is happening on EMI, as per the consumer durable brand.
“Even when the price goes up, the corresponding effect on the consumers’ wallet is not much because the payment gets divided into 12 to 24 months,” he mentioned.
Praveen Sahay, a research analyst at Prabhudas Lilladher, believes that unseasonal rain has impacted sales in quarter four. He further added that the channel checks indicated that there is some decrease in the inventory level.
Sahay also stated that he likes Havells in their coverage due to their diversified product portfolio. The company's diversified product portfolio has helped it weather the storm during difficult times.
“In our coverage, we like Havells because they are diversified throughout different product basket,” he said.
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