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Exports are expected to remain a key growth driver for India's wires and cables W&C) industry in the second half of financial year 2026-27, supported by a substantial order pipeline, even as domestic sales volumes remain subdued and competition intensifies, according to a report by Kotak Institutional Equities.
As per the report, the sector witnessed a 46 per cent year-on-year increase in revenue and a 42 per cent rise in earnings before interest and taxes (EBIT) during the second quarter of financial year 2026-27. This surge was mainly "led by commodity tailwinds, even as volumes were soft," Kotak said. However, investor sentiment remained cautious due to several concerns, including lower profit margin expectations, reduced sales volume growth forecasts, higher planned capital expenditure and rising expenses on advertising and promotional activities. At the same time, competition in the sector also intensified, with some emerging players reporting strong sales volume growth and securing large orders from data centres. Looking ahead, "Exports remain a bright spot, with substantial order books to be executed in 2H," it said. Apart from this, Kotak highlighted that India's air-conditioner and home appliances industry is gradually recovering from a difficult period. "A low base, extended summer, and some pre-buying ahead of price hikes led to ~35-40% yoy primary RAC growth in 2Q," it said. Meanwhile, it added, despite strong sales growth, air-conditioner manufacturers continued to face pressure on profitability. The brokerage house further added, "...strong second summer has led to a lean channel inventory." while "new price hikes in 3QFY27 TD has improved profitability outlook at the margin." Additionally, companies have reported rising shift toward premium products which are less price sensitive, as per the report.Kotak also noted that sales of electrical consumer durables (ECD) increased, supported by strong demand for solar-related products and kitchen appliances, along with higher product prices. "ECD companies reported ~25%/71% yoy topline/EBIT growth, led by a low base (flat-to-negative 2Y EBIT CAGR for top 2 players), multifold growth in solar products and price hikes (mid-to-high teen price hikes in fans CYTD," it said. (ANI)
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