Mint Explainer | Why, despite a GST cut, Indian consumer durables sector is not celebrating yet?

GST cuts to take effect in September. Analysts at JM Financial predicted in September that the price reduction could translate into 9-10% additional volume growth for air-conditioners. As the segment is fiercely competitive, most sellers passed the benefit on to customers.Listed AC makers reported a difficult quarter.

Newly listed LG India reported a 61% drop in profit, while Bluestar posted a 38.6% fall in profit and Voltas a 35% fall. Lloyd Consumer, owned by listed Havells India which also sells ACs, saw a 5.6% decline in revenue in the quarter. Both Crompton Greaves and Whirlpool India reported lower profits, while Bajaj Electricals reported a loss.

Companies note that demand has not picked up. According to Thiagarajan, the reason is that FMCG-related demand has not bounced back. "We thought with the substantial reduction in GST for food and processed food products, there should be huge demand growth, and at least, we have not seen till now that part reviving,” he said, pointing to the slow uptick from ice-cream and quick service restaurant segments.Prices of cooling appliances such as room ACs and refrigerators rose 5-10% from 1 January as the new revised star rating from the Bureau of Energy Efficiency (BEE) came into force.

Older 2025 models will appear less efficient under the new 2026 metrics, meaning a unit rated 5-star in 2025 may be reclassified as 4-star, and a 4-star as 3-star. Managements acknowledged price hikes due to rupee depreciation. Additionally, copper prices hit new highs, after rising about 60% in the past 12 months.