Housing capex to sustain strong revenue traction for 'Fan' segment

Housing capex to sustain strong revenue traction for 'Fan' segment

AgenciesUpdated: Saturday, October 16, 2021, 07:20 PM IST
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If the ongoing housing theme sustains, led by low home loan rates and positive consumer sentiment, categories like fan would benefit./ Representational Image |

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.

(With inputs from IANS)

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