Revenue Growth Outlook for Large Appliance Manufacturers in India

Manufacturers Brace for Moderate Growth Amidst Changing Market Dynamics

New Delhi, November 2 (ANI) — The large appliance manufacturing sector in India is set to experience a slowdown in revenue growth, with projections indicating a modest increase of 5-6% for the current financial year. This follows a robust 16% growth recorded in the previous fiscal year, according to a recent report by Crisil Ratings.

The anticipated dip in growth can be attributed to a significant decline in demand for cooling products during the first half of the year, primarily due to an early onset of the monsoon season. However, a partial recovery is expected as the Goods and Services Tax (GST) cut on air conditioners (ACs) and large televisions takes effect just in time for the festive season. This tax reduction, which lowers the GST rate from 28% to 18%, is projected to save consumers between ₹3,000 and ₹6,000 per unit.

Shounak Chakravarty, Director at Crisil Ratings, noted, “For buyers with fixed budgets, this can spur premiumisation. Increased consumer spending during the festive season is expected to drive a growth of 11-13% in the second half of the year, compensating for the low-single-digit decline seen in the first half.”

Despite the moderating growth, manufacturers are not shying away from capital expenditure (capex). The AC segment, in particular, is poised for increased investment in compressor capacities as new Bureau of Indian Standards (BIS) norms on imports come into effect in April 2026. The overall credit profiles of these companies are expected to remain stable, largely due to their low dependence on debt.

Crisil’s analysis, based on discussions with seven major manufacturers representing 50-55% of the ₹130,000 crore large appliances market, highlights that while revenue growth may slow, the long-term potential remains strong due to low penetration rates of these appliances in India.

The refrigerator segment, which accounts for 31% of sectoral revenue, is expected to see a resurgence in demand, particularly for larger capacity models, as consumer habits shift towards weekend shopping and an increased consumption of frozen foods. Meanwhile, the washing machine segment is projected to maintain a growth momentum of 7-8%, driven by changing washing patterns and a rising working population.

However, the industry faces challenges, including intensifying competition and rising raw material costs, which are expected to shave off 20-40 basis points from operating margins. Operating margins are projected to decrease slightly from 7.5% last fiscal year to 7.1-7.2% this year.

Crisil cautions that volatility in the prices of key raw materials such as steel, copper, and aluminum, along with competitive pressures, will be critical factors to monitor moving forward.

As manufacturers navigate these challenges, the focus remains on capitalizing on the long-term growth potential of the Indian appliance market, ensuring they are well-positioned for the future.