The revenue of consumer durable manufacturers will surge 11-12 per cent this fiscal, continuing the healthy run after a strong 13 per cent growth last fiscal, Crisil Rating said in a report.

This will ride on rising adoption of consumer durable financing. Festive spending and strong growth in housing sales should support overall volumes, following strong demand for cooling products during the summer season this fiscal, the rating firm said.

Operating margins will improve to 6.8-7 per cent this fiscal from 6.5 per cent last fiscal, driven by stable raw material prices, but remain below pre-pandemic highs because of intense competition.

While total capital expenditure (capex) this fiscal will remain similar to that incurred last fiscal, consumer durable makers will invest on introducing new features that offer differentiated value proposition to consumers.

Strong cash generation and healthy liquid surplus will keep reliance on external debt low, supporting the credit profiles of players.

A study of eight consumer durables makers, accounting for 55-60 per cent market share in value terms, indicates the trend.

Shounak Chakravarty, director, Crisil Ratings Limited, said: “Increasing adoption of easy financing options such as no-cost equated monthly instalments (EMIs), credit card loans and buy-now-pay-later schemes are making high-value purchases more affordable and accessible. Loans under this category are expected to grow 18-20 per cent this fiscal, after having almost doubled over the last four years.

Preference for smart home compatible consumer durable products which are IoT (internet of things) enabled and provide seamless integration with mobile devices are on the rise. Further, demand for appliances with higher capacity continues to outpace demand for entry-level categories.

Changes in buying patterns (stocking up on weekends) and growing availability of frozen food are driving up demand for larger capacity refrigerators. The rising trend of weekend washing is driving sales of washing machines with higher capacity.

In the television segment, narrowing gap between the costs of a 55+ inch and 40-43 inch screen is driving demand for larger screen televisions.