Valuations, growth hopes to limit downsides for white goods firms

Margins expected to bottom out; brokerages prefer category leaders

Sluggish demand, higher costs, and insufficient price hikes are expected to weigh on the October-December quarter (third quarter, or Q3) performance of consumer durables companies. Except for the wire and cable industry, most segments are expected to see volume growth challenges due to regulatory transition (fan segment) and competitive pressures (air conditioners, or ACs). 

Analysts, led by Vinod Chari, of BOB Capital Markets, expect a dull Q3 for stocks they track, given the lower volume offtake in the aftermath of the festival season. While premium products saw buoyant sales, the entry-level segment (where volumes are higher) remains distressed. 

Taking cognisance