Consumer Durables Stocks To Benefit From Real Estate Demand, Premiumisation, Says Goldman Sachs

Real-estate driven demand and premiumisation across categories will drive growth in Indian consumer durables and electricals in financial year 2026, Goldman Sachs said in a note on Wednesday. Moreover, the brokerage expects domestic manufacturing to rise in various categories of the sector.

Goldman Sachs sees the consumer durables to deliver above–trend growth with a below-trend margins and return on equities in the upcoming financial year.

The latest commentary from most companies in the space indicated green shoots in demand from real estate space, especially in switches, switchgear, and home wires, Goldman Sachs said in a note. This demand will start to trickle down in 12 to 18 months.

New home sales in top cities in India has increased 25% on the year in financial year 2023 and 2024, compared to 9% during the period between financial year 2018-22.

"...as per PropEquity, we expect such growth to be reflected in the demand for electricals and durables over the next 18-24 months as construction sites reach a more mature stage," Goldman Sachs said.

Goldman Sachs expects more launches in the premium consumer durables. There will be higher demand for large screen televisions, and higher growth in variable refrigerant volume and variable refrigerant flow compared to fixed speed air conditioners.

Apart from the above mentioned segments, Goldman Sachs sees higher growth in fully–automated washing machines and large kitchen appliances, which should drive revenue growth higher than volume growth for various categories.

With present restrictions in place, the demand in domestic manufacturing of durables and electricals will increase. As companies focus more on building capability, margins will contract initially. It will be a positive margin lever for brands who have more options for procurement.

Havells India Ltd. has the most diversified portfolio of categories in the space, according to Goldman Sachs. The company is premiumising its offering across segments through smart lighting, home automation, premium fans and large kitchen electricals. This will allow Havells India to benefit from the uptick in real estate even though Havells' valuations at 53.5 times on FY26 estimated EPS.

Goldman Sachs rates the stock 'Buy'.

The company is highly leveraged to a real estate upcycle and trading at 32.5 times of financial year 2026 estimated earning per share, making it risk–reward attractive. Goldman Sachs rated the stock 'Buy'.

Goldman Sachs expects increased competition for Voltas Ltd., along with its valuations, apparently pricing in optimistic growth. This makes the risk–reward unfavourable. Hence, the brokerage gave a 'Sell' rating to the stock.

Symphony Ltd. gets a 'Neutral' rating from the Goldman Sachs. Its products are very weather dependent with the international outlook uncertain as supply chains globally undergo changes.