Business EconomyPosted at: Oct 30 2025 4:19PM


Growth will moderate 5-6pc for large appliances makers this fiscal: CRISIL

New Delhi, Oct 30 (UNI) Manufacturers of large appliance makers will see revenue growth moderate to 5-6 percent this fiscal on a high base of 16 percent run-up logged up fiscal, a CRISIL report said today.
The Credit Rating Information Services of India Limited (CRISIL) report said a sharp cut in demand for cooling products during the first half due to the early onset of monsoon would only see a partial lift-up led by goods and services tax (GST) cut on AC and large TV coming in just before the festive season.
The rating agency noted moderating revenue growth, along with intensifying competition and dearer raw materials that will also shave off 20-40 basis points (bps) from operating margins.
Shounak Chakravarty, Director of CRISIL Ratings, said, “The 1000 bps cut in GST to 18pc for ACs and large-screen TVs (58pc of sectoral revenue) will translate into savings of Rs 3,000 to 6,000 per unit. For buyers with fixed budgets, this can spur premiumisation. Furthermore, with the price dip coming into effect just before the festive season, increased consumer spending is expected to drive 11-13pc growth in the second half, with 100-150 basis points being attributed towards GST benefits. This shall compensate for low-single-digit growth in the first half.”
“Improving consumer sentiment will also boost consumption in other categories. Refrigerators (31 percent of sectoral revenue), which witnessed flattish sales in the first half, are likely to see low double-digit growth in the second half, driven by higher demand for larger capacity models due to weekend shopping and increasing consumption of frozen goods,” it said.
CRISIL noted that the washing machine segment (11pc of sectoral revenue) was a rare beneficiary of the early monsoon, which is driven by the need of dryers.
Moreover, a rising proportion of the working population and changing washing patterns, such as weekend washing, will drive demand for fully automatic and larger capacity models will help maintain growth momentum of 7-8pc this fiscal.
On the other hand, moderating revenue growth and continuing intense competition will limit meaningful price hikes amid higher input costs such as steel and aluminium, and copper. Resultantly, the operating margins are also reducing slightly to 7.1-7.2pc this fiscal from 7.5 last fiscal.
Prateek Kasera, Team Leader of CRISIL Ratings, said, “ The AC segment will see substantially higher capex this fiscal as manufacturers set up compressor capacities to mitigate challenges related to imports (60-65pc of requirement) with the stringent BIS norm kicking in next fiscal. Consequently, overall capex for the sector will rise 60pc to Rs 2400 crore this fiscal with the AC segment accounting for nearly half of this.”
CRISIL said healthy cash flows will ensure low reliance on external debt, and the interest coverage and net cash accrual-to-adjusted debt ratios are likely to remain at over 20 times and 2.5-2.6 times this fiscal and akin to last fiscal.
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