Quote on the impact of the current repo rate, Rupee devaluation and open cell price on the consumer durables industry
A falling rupee versus the US dollar and an increase in EMIs as a result of the RBI’s 40 basis point repo rate hike have created fresh hurdles for the consumer durables business. The rupee’s devaluation will raise input costs and, and eventually the, product prices. Currently there is no price hike for our products (TVs) because there has been a significant correction in the price of Open cell costs, and the stock is accessible at cheaper rates. Also, because of the huge decline in open cell pricing, both manufacturers and brands were forced to lower prices instantly in the market, due to the low demand in this season, which is more of cooling items and less of TVs. Despite the high cost of the stock, there was a price correction. Despite costlier inventories, margins were skewed. China made a frantic price drop in the industry
Having said that, right present, there is no price increase of TVs in June, but in July, raw material prices may climb, resulting in a 7 to 8% product price increase. Basically, when the next shipment arrives, the company’s pricing will be adjusted to account for the rupee’s impact. Having said that, as the situation in China improves, we will see a growing trend in the price of open cells, which would raise the product price further.
Furthermore, the sector is facing a number of issues in terms of shipments, including delays in shipments and vessel availability as a result of the Chinese port shutdown; many sites are still locked down, and we are not receiving goods on time. This might have a negative impact on overall production.
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