June 2022
Sample Size: 14 Companies
Median Rating Value of sample size: A-
Individual Parameters Contributing to the Score
Moderate Over Supply
The volumes were impacted due to logistical reasons & also lower demand due to deferrals of purchases by households. As per CMIE data, the industry reported y-o-y growth in sales by 3.8% from Rs.28.3 billion for March 2021 quarter to Rs.29.3 billion during quarter ended March 2022. Exports of Washing Machines increased by 13.9% from Rs.4.9 billion in FY21 to Rs.5.5 billion in FY22. However, the increasing availability of finance and the increasing penetration of online platforms is expected to drive demand for the sector.
Neutral
The industry remains fragmented with several established and local brands. Cheaper imported products from China have also garnered consumer interest. However, brand franchise and distribution reach are the key factors in building competitiveness in the industry.
Stable Regulatory environment
The household appliances come under the 12-18% GST bucket, making certain categories expensive for end consumers. While India imports significantly from China, the government is likely to encourage and facilitate the growth of the indigenous players going forward.
No supply disruptions / very narrow price band or fluctuations
While Covid 19 had significantly impacted global supply chains in the early part of FY21, it has been brought under control. However, dependence on imports for certain critical components continues. Input price pressures will continue to squeeze margins.