Blue Star share price gained 1.7% in intraday trades on Wednesday and closed with gains of almost 1%. Voltas share price also ended the day with gains of 0.16% on the BSE on a day when benchmark indices were down more than 2%. The Air-conditioner producers (Blue Star and Voltas) and even Lloyds (Havells) are gaining regularly and trading near 52-week highs seen recently.
Though festive season sales for all consumer durables generally remained soft during the quarter gone by, analysts are of the view that inventory placement ahead of peak season are likely to drive volume growth for air conditioner producers during the quarter gone by (October-December) quarter. It is not only volumes growth outlook that keeps expectations from cooling product manufacturers high during the Q3, analysts are also positive on the earnings outlook for producers helped by lower commodity prices.
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Voltas, Blue Star and Lloyds are also seeing market share gains said Research analysts as Harshit Kapadia at Elara Securities India Pvt Ltd.
We expect AC companies to see volumes growth of of 15-20% in Q3FY24, said analysts at PhillipCapital Research. Companies such as Daikin, Voltas and Blue Star saw higher primary billing. Additionally, AC companies’ raw material costs fell 8%, which should support margins in Q3FY24, they added
Other analysts also remain positive on demand trajectory in the near terms and declining costs aiding earnings performance.
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Demand tailwinds are ahead while margins bottoming out said analysts at BNP Paribas. Voltas and Havells remain their top picks
They continue to prefer the B2C companies within their coverage. While competition is expected to remain high, particularly across electric consumer durables (ECD) and white goods, the recovery in consumption demand and a pick up in real estate activities should drive a healthy offtake for the durables sector in 2024, along with margin recovery from the FY23 lows. Analysts at BNP think that the sector’s earnings downgrade cycle is largely behind.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions
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Omprakash Tiwary is a business writer who delves into the intricacies of the corporate world. With a focus on finance and economic landscape. He offers readers valuable insights into market trends, entrepreneurship, and economic developments.
