Consumer Durables

The Consumer Durables sector includes companies that manufacture and sell long-lasting goods like home appliances, consumer electronics, furniture, and automobiles. These items are purchased infrequently and are sensitive to economic cycles and consumer sentiment.

The Consumer Durables sector is influenced by economic indicators and consumer behaviors. Key drivers include consumer confidence, disposable income, employment growth, household formation, and interest rates. Urbanization and a growing middle class in emerging markets also fuel demand. Technological advancements drive a shift towards smart, energy-efficient, and IoT-enabled appliances. E-commerce reshapes distribution, while regulatory changes and environmental awareness impact costs and sustainability efforts.

Key sub-industries include home appliances, consumer electronics, automobiles, and home furnishings. Notable global companies include Apple, Tesla, Toyota Motor, Samsung Electronics, LG Electronics, Whirlpool Corporation, Panasonic Corporation, Sony Corporation, Haier Group, and Electrolux AB. In homebuilding, NVR, D.R. Horton, and Lennar are prominent.

In the past six months (January to July 2025), the Consumer Durables sector has experienced mixed performance. The Nifty Consumer Durables index in India saw a decline of 6.30% over a six-month period, influenced by macroeconomic challenges such as high interest rates and inflation. However, some reports indicate a slight short-term uptick despite a decline over the past year. In India, average monthly spending on consumer durables soared by 72% in FY25, driven by increased home ownership and demand for new home furnishings. Globally, consumer durables production is projected to increase by 2.6% and sales by 3.4% in 2025. The US consumer durables sales are expected to grow by 2.3% in 2025, while India's sales are anticipated to rise by 5.3%. Despite these positive sales forecasts, foreign institutional investors (FIIs) have been net sellers in the Indian consumer durables sector every month in 2025, with outflows totaling Rs 13,188 crore. The outlook for the Consumer Durables sector remains optimistic, with growth expected to accelerate in advanced markets in 2025, driven by premium products and policies like the PLI scheme. Lower interest rates, technological advancements, sustainability, and e-commerce expansion are expected to be key drivers. Challenges include geopolitical and economic risks, trade tariffs, credit risk for smaller retailers, high raw material costs, and limited pricing flexibility.

Investing in the Consumer Durables sector is considered intermediate risk due to its cyclical nature. Demand grows faster than GDP during expansions but contracts more during recessions. Investors consider metrics like P/E ratio, P/B ratio, and ROE. Effective working capital management and sensitivity to raw material prices are also key considerations.