10 Consumer Durable Stocks With Up to 46% Upside as RAC Demand Rebounds
There seem to be encouraging signs of improvement in India’s consumer durable sector, which had a tough FY26 for several reasons. Room air-conditioners appear to be a major driving force behind the revival, which is being helped by better penetration rates and financing. There seems to be an improvement even for refrigerators and washing machines. But stiff competition and rising cost of inputs remain headwinds. In this context, here are 10 stocks in the consumer durable sector to look out for.
Brokerage View
According to PL Capital’s channel-check findings, the consumer durables segment is experiencing a general demand revival driven by RACs and aided by penetrations and financing. Nevertheless, the factors of stiff competition, high cost of copper, forex, and inability to pass through prices will continue to weigh on the bottom line in the coming period. PL Capital anticipates that volumes will stay strong in FY27, with margin revival taking place in Q4FY27.
RAC Recovery Signals a Turnaround in Consumer Durables
The market for RAC (Room Air-Conditioner) fell by about 10% to almost 12 million units in FY26 compared to 14-15 million units in FY25 owing to the tough base effect and cost pressure from rising raw material prices. On the other hand, H1FY27 has witnessed a marked revival in performance, and the expected growth in the industry is likely to be 25-30%.
The recovery is becoming more and more penetration-oriented, as 80% of RAC units being sold are first-time purchases, and about 75% of the demand comes from entry level categories. Financing has also been playing a big role in driving the demand, which is at about 40% of total industry RAC unit sales, and some brands have financing share of close to 50%. E-commerce business share is now around 17-18%, up from 8-10%.
Market Share and Regional Trends Remain Important
The sales for secondary RACs increased significantly in July 2026. Voltas, Daikin, and Godrej increased their secondary market share by 150 bps, 70 bps, and 90 bps, respectively, whereas LG and Lloyd decreased their secondary market share by 250 bps and 150 bps. Geographically, the South still stands out as the best region, the West showed improvement in May 2026, and the East was stable; however, the North remained the weakest region.
Margin Recovery Could Take Longer
Profitability still remains a major issue despite volume recovery. The increase in costs associated with higher prices of copper, forex, and other raw materials is yet to be fully charged to the consumer while tough competition makes sure that companies concentrate on their market share. Hence, margins of RAC are likely to continue to remain under pressure during Q2 & Q3 FY27 and recovery may take place during Q4 FY27 with around 150-200 bps improvement in margins.
Refrigerators and Washing Machines Also Show Improvement
This segment has been growing well after FY26 volume dropped to about 13 million units from 14 million units in FY25. This segment was worth about ₹280 billion, with July 2026 volume rising by roughly 21% compared to last year. Both Samsung and LG have seen erosion in market share, whereas Haier, Godrej and Bosch have managed to increase their share. Beko is also increasing its presence in Tier 2 and Tier 3 markets.
The washing machine category has proven to be quite robust. Growth for July 2026 was around 11% YoY, whereas annual volumes reached almost 10 million units, as against 9.8 million units in FY25. Nonetheless, the market is dominated by low-end and top-load models, thereby limiting premiumisation and margins.
Compressor Economics and New Growth Opportunities
Compressor production continues to be mainly cost-driven and scale-driven with the likes of GMCC and Highly Group of China being very cost-effective. The compressors represent about 16-17% of BOM cost and it becomes necessary to have better procurement and cost-effectiveness in production. Local production can help ensure the security of supplies while backward integration can become more practical with increased volume.
Apart from conventional RACs, other areas that offer potential include commercial ACs, commercial refrigeration, projects, data centers, and liquid cooling systems. The commercial refrigeration can take advantage of cold chain, frozen food, and food services demand.
PL Capital Target on Consumer Durable stocks
Company
Target Price
Current Price
Upside
Crompton Greaves Consumer Electricals
330
226
46%
KEI Industries
6,001
4589
30%
Polycab India
10,764
8,362
28%
Cello World
410
327
25%
Bajaj Electricals
403
326
23%
Havells India
1,319
1,096
20%
Voltas
1,308
1,136
15%
Blue Star
1,653
1,558
6%
R R Kabel
2,596
2434
7%
LG Electronics India
1,723
1690
2%
Conclusion
Consumer Durables is moving into a phase of recovery, with the demand recovery in this industry being led by RACs, followed by refrigerators and washing machines. The competition is likely to be tough, and the high input cost can put margin pressure on the companies. Given that demand is being penetration-driven, there are various sources of growth for the industry.