The growth rate across verticals in the Consumer durable space has been strong on the back of rising middle class population and increased spending. The impact of Goods and Services Tax on the consumer durable sector is expected to remain neutral or negative, especially for companies which are tax exempted or fall under concessional tax brackets.
|Old rates||Growth Rate from FY12- FY17|
|Cables and wires||28%||19%||13.90%|
|Solar water heater||5%||0%|
Source: Ministry of Finance
Over FY12-17, ACs, air coolers, lighting, etc., have seen a 15-25% growth; however, lower commodity prices impacted value growth (6-8%) of cables & wires, pumps etc., over the past 2-3 years.
The consumer durable segment organized players are strengthening their hold on the market through mergers and acquisitions, thereby making the unorganized players even weaker in the coming years. The table below reflects the aggressive expansion seen in the organized segment of Consumer Durables.
|Havells||Lloyd||INR 15 bn acquisition||2017|
|V Guard||Guts Electro-mech||74% stake||2017||Switchgears|
|Voltas||Arcelik||50:50 JV with 100 mn each||2017|
|Bajaj Electricals||Morphy Richards||Trademark extended till 2022||2017|
|Havells||Promptec||51% stake||2015||Expertise in solar|
|Finolex cables||J-Power systems corp||INR 1 bn||High voltage cables|
|Finolex cables||Corning||2013||Optical fibres|
|Phillips||Maya appliances||2011||South indian market|
|KEI||Brugg Kabel||2016||Technical tie up|
|Bajaj Electricals||Starlight Electricals||47% holding||2017|