Consumer durables shares gain on demand recovery in June; Polycab up 6%

Strong pent-up demand was seen in refrigerators, washing machines, and small appliances categories in June

Shares of consumer durables companies on Wednesday rose up to 6 per cent on the BSE on reports that the sector witnessed 95-100 per cent recovery in sales in June 2020 post relaxation of the novel coronavirus-induced lockdown.

Dixon Technologies (India) hit a 52-week high of Rs 6,150, after gaining 5 per cent on the BSE today. In the past month, the stock has rallied 23 per cent, as compared to 7 per cent rise in the S&P BSE Sensex. The company is the largest home-grown, design-focused and solutions company engaged in manufacturing consumer durables, lighting products and mobile phones.

Polycab India, the largest manufacturer of wires and cables in India and a fast-growing player in the FMEG space, gained 6 per cent to Rs 884 in intra-day trade today. Whirlpool of India was up 2.5 per cent to Rs 2,244, while V-Guard Industries up 2 per cent to Rs 174. Bajaj Electricals and Amber Enterprises were up 1 per cent each on the BSE. In comparison, the S&P BSE Sensex was down 0.08 per cent at 36,645 points at 10:25 am.

After the relaxation of lockdown, sales for June recovered to almost pre-Covid levels, with strong pent-up demand seen in refrigerators, washing machines, and small appliances categories.

Whirlpool of India could see faster rebound backed by new product launches and sustained market share gains. Additionally, entry-level products would see better growth from tier 2 and smaller cities, which would benefit Whirlpool through its strong distribution reach, analysts at Emkay Global Financial Services said.

“Bajaj Electricals, one of the largest plays in the fans & small appliances categories, reported positive sales growth in June. We believe pent up demand coupled with normalisation of business activities in containment zones bodes well for Bajaj Electricals, Havells India, V-Guard Industries,” ICICI Securities said in a note.