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India's consumer durables, electricals and EMS sector is poised for a gradual recovery after a volatile start to the summer season, with demand momentum improving sharply in recent weeks amid rising temperatures, according to a report by Nuvama Institutional Equities.
The report highlights that while early 2026 demand remained uneven, impacted by regional slowdowns, recent heatwave conditions have triggered a strong rebound in sales, particularly in southern markets, with pan-India volumes witnessing a significant uptick in the last 7-10 days. Despite the recovery, April sales are expected to remain largely flat year-on-year, indicating that the full impact of improved demand may reflect in the coming months. The outlook remains contingent on weather patterns, with the possibility of an extended summer in northern and central regions expected to support consumption going forward. The report notes that companies have already implemented price hikes of 6-8 per cent to offset input cost pressures, with further increases likely. However, additional hikes may be required to fully protect margins amid persistent commodity inflation and currency-related pressures. Channel inventories are currently slightly above normal levels but remain manageable. The supply chain is operating with a cautious and disciplined approach, with both brands and retailers aligning stocking decisions closely with demand visibility. Limited discounting and controlled inventory flows are contributing to a more stable operating environment. Premium segments across categories continue to outperform mass-market products. Strong growth has been observed in high-end appliances such as side-by-side refrigerators, while entry-level categories remain under pressure. In the mobile segment, demand is shifting towards higher-value offerings, while the sub Rs15,000 category faces heightened price sensitivity and competitive intensity. Looking ahead, the sector is expected to post modest single-digit growth, supported by favourable weather conditions, gradual inventory normalization, and sustained premium demand. However, margin pressures and demand volatility remain key monitorables. (ANI)
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