Large appliances makers likely to see moderate revenue growth at 5-6% in FY26: Crisil Ratings
Crisil Ratings in its latest report has said that manufacturers of large appliances are likely to see their revenue growth moderate to 5-6% this fiscal (FY26) on a high base of 16% logged last fiscal, after demand for cooling products fell sharply because of the early onset of southwest monsoon in the first half. A reduction in goods and services tax (GST) on air-conditioners (ACs) and large televisions (TVs) that followed in early September, just as the festive season began, will offer only a partial offset.
As per the report, moderating revenue growth, along with intensifying competition and dearer raw materials, will also shave off 20-40 basis points (bps) from operating margins. This, however, is unlikely to deter companies from sustaining or stepping up capital expenditure (capex) across categories. Notably, the AC segment will see a substantially higher capex for compressor capacities as the Bureau of Indian Standards (BIS) norms on imports kick in from April 2026. Credit profiles will remain stable because of low dependence on debt.
The rating agency further noted that Moderating revenue growth and continuing intense competition will limit meaningful price hikes amid higher input costs such as steel (because of safeguard duty on imports) and aluminium and copper (due to growing demand- and supplyside pressures). Consequently, operating margin will reduce slightly to 7.1-7.2% this fiscal from 7.5% last fiscal.
