India Consumer Durables

Research evidence excerpt

India Consumer Durables

Macquarie Equity Research India Consumer Durables

Key risks

A weaker-than-expected macro environment leading to demand disappointment and slower

execution are the key risks. Continued volatility in commodities price is the key margin risk.

Please find company specific risks below:

Polycab: Higher-than-expected market-share loss in cables with rising competition, weak

cable exports and margin downside from higher commoditys prices are the key risks.

Havells India: Slower growth in wires relative to cables and slower-than-expected recovery in

consumer demand are the key earnings risks. In addition, earnings disappointmen could drive

multiple contraction, posing further downside risk to the share price.

Crompton: Slower-than-expected traction in the consumer business and weaker-than-

expected premiumisation of the consumer portfolio are the key revenue and earnings risks.

Voltas: Upside: Better-than-expected RAC demand, margin surprise led by industry's ability

to take price hikes and the Street's willingness to assign a higher multiple to RAC business.

Downside: RAC demand disappoints post an in line summer season in FY27E; margin pressure

led by global peers' localisation focus and RAC market-share loss.

Figure 6 - India Durables: Earnings trend and outlook summary (Rs m)

Rs Mn Earnings trend and Outlook Summary CAGR

Revenue FY22 FY23 FY24 FY25 FY26 FY27E FY28E FY29E FY19-25 FY22-27E FY27E-29E

Crompton 53,732 58,093 63,884 70,283 71,932 81,136 92,389 1,06,066 8% 9% 14%

Havells 1,38,885 1,68,684 1,85,499 2,17,458 2,24,798 2,57,847 2,89,087 3,24,258 14% 13% 12%

Polycab 1,22,038 1,41,078 1,80,394 2,24,083 2,88,838 3,50,295 3,99,705 4,56,091 19% 23% 14%

Voltas 79,345 94,988 1,24,812 1,54,128 1,42,445 1,74,844 1,97,852 2,19,681 14% 17% 12%