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Fanning Growth: Housing Capex to sustain 'Fan' inds revenue traction
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Top Stories |
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SME Times News Bureau | 16 Oct, 2021
Improving housing activities along with resumption of Capex are expected
to sustain strong revenue traction for the 'fan' segment of the
consumer durables industry.
Accordingly in the coming quarters,
if the ongoing housing theme sustains, led by low home loan rates and
positive consumer sentiment, categories like 'fan' would benefit.
Besides,
new house demand leads to higher consumption as higher number of fan
units are installed in a new house versus general replacement demand and
premiumisation.
According to RBI's financial stability report
released in July 2021, the housing slowdown seen even before the onset
of Covid has bottomed out in Q1FY21.
The unsold inventory levels
have dropped steadily in the past four quarters. While unsold inventory
remains elevated, a reduction in it shows recovery in the housing
market.
"We believe improving housing activities and resumption
of Capex would sustain strong revenue traction in the coming quarters,"
HDFC Securities said in a report.
"Leading companies have already
taken price hikes to pass on most of the costs; however, continued raw
material inflation remains a concern."
According to the report,
leading fan players have initiated several effective strategies that are
not only developing the category but will also help gain market share.
"Consumers
prefer top brands across consumer categories, which would be of benefit
to the top brands in the fan category. We expect market to consolidate
with top players gaining market share."
At present, top brands
in the segment include Crompton Consumer, Havells, Orient Electric,
Voltas, TTK Prestige, V-Guard and Symphony amongst others.
Notably,
India began its manufacturing journey of ceiling fans in the 1930s and,
in 1937, Greaves Cotton entered into a JV with Crompton Parkinson of
England to manufacture ceiling fans in India.
Currently, the fan industry is estimated to be worth above Rs 9,000 crore in the domestic market.
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