Channel checks for Mar’26 indicate demand trends remain mixed across sectors, with strong traction in autos supported by GST rate cuts, festive demand and rural recovery; consumer durables showing resilience led by RAC and fans; building materials remaining fluid amid raw material disruptions and supply issues; and cement demand muted across regions due to festivals and unseasonal rains. Pricing trends remain varied across segments amid ongoing cost pressures.
Positives: (a) Two-wheelers sustaining strong momentum across ICE and EV, supported by GST-led affordability and seasonality (b) PV demand driven by rural recovery, strong bookings and SUVs/new launches (c) RAC demand seeing early seasonal acceleration with favourable weather and channel readiness (d) Cement demand strength in East with pricing support and upcoming hikes (e) Select building materials (paints, MDF) showing sequential recovery with pricing support.
Negatives: (a) Muted cement demand across regions due to festivals and unseasonal rains (b) Persistent raw material pressures including PVC resin, aluminium and copper (c) Supply constraints in key auto models (d) Near-term headwinds in W&C (e) Ongoing disruptions in ceramics with majority units shut.
Outlook: Demand expected to remain supported by underlying momentum in autos and seasonal tailwinds in RAC, while recovery across building materials remains gradual; raw material trends, pricing sustainability and supply conditions remain key monitorable.
Auto:
- 2W segment: Demand remained robust in March, with 2W retail sales rising ~29% YoY, supported by GST rate cuts and festive buying in the latter half of the month. Both ICE and E2Ws witnessed healthy traction during the period. For FY26, overall 2W retail growth stood at 13% YoY. While demand was largely subdued in the first half, it picked up meaningfully from the festive season onward, aided by GST rate cuts. Going ahead, this momentum is likely to continue, driven by the upcoming wedding season from April and sustained underlying demand following the GST rate cuts.
- PV segment: March was a strong month for the PV segment, with retail sales growing ~23% YoY. Demand remained healthy across both rural and urban markets, with rural recovery being particularly encouraging as it supported small car sales, even as SUVs and utility vehicles continued to anchor overall volumes. Improved affordability following GST rationalisation, along with healthy booking pipelines driven by new launches, further aided demand during the month. For FY26, PV retail sales grew 13% YoY, with demand largely subdued in the first half but witnessing a strong pickup in the second half following GST rate cuts.
Building Materials:
- Situation remains fluid, but organized manufacturers are better placed to ride out the situation due to their scale of operations vs. semi-organized/unorganized players. One key takeaway from the interactions was that larger organized players are as now better placed to ride out the inflationary pressure + availability issues and people highlighted that current situation is in some ways similar to the post COVID lockdown + supply chain disruption witnessed in FY21/FY22.
- Since a lot of core R.M. suppliers across the globe have taken force majeures, the correction in downstream R.M. prices would happen gradually once geopolitical situation stabilizes as Feedstock for those plants, once they resume operations, will also arrive gradually. So intermediate and end product prices would not move down as fast as they have risen. SME’s again will face the brunt of the R.M. disruption as they are already curtailing their operations or taking complete shutdown. It will take 1-2 quarters for them to start their operations and reach normalization once geopolitics stabilizes.
Cement:
- Cement demand muted in March in North and West due to festivals and unseasonal rains, with mid-single digit growth; North saw price declines while West prices remained largely stable.
- South demand ~7–8% with price declines in select regions; East remained strongest with near double-digit March demand and price hikes. Central demand stable at mid-single digit with slight price decline and flattish trends vs 3Q exit.
Consumer Durables:
- Large Appliances: Consumer durables demand remains resilient, led by RAC with ~10% YoY growth in March, supported by dry weather outlook for April and adequate stocking of finished goods and raw materials; LPG disruption continues, substitution impact not material. Fans have seen mid to high single digit growth in 4QFY26.
- Wires & Cables: W&C experiencing near-term demand headwinds in 4QFY26; volume growth 8–10% YoY, partially supported by value growth. Raw material prices elevated, with sharp YoY and QoQ increases in aluminium and copper, impacting with a lag.
Consumer Staples:
- Demand trends across the sector remain stable. Competitive intensity remains elevated especially in biscuits, with regional and local players continuing to exert strong pressure, particularly through better trade margins.
- Large incumbents have intensified promotional intensity via ATL activations as focus remains on volume led growth. Some supply-side pressures are emerging amid geopolitical uncertainties at the same time, input cost inflation—particularly in crude-linked derivatives—is driving calibrated price hikes across categories.
Key Monitorable:
- Auto demand and supply: Sustainability of strong two-wheeler (~29% YoY) and PV (~23% YoY) momentum alongside persistence of supply constraints and long waiting periods in high-demand models.
- Cement price hikes absorption: Ability to absorb announced price hikes across regions (South ~Rs.50/bag; others Rs.20–30/bag) amid currently muted demand conditions.
- Building materials normalization: Pace of recovery in ceramics with majority units shut and dependence on gas availability, labour and geopolitics for production normalization.
- Raw material trends: Movement in PVC resin prices (~Rs.115/kg) and elevated aluminium and copper prices impacting pipes and W&C with lagged pass-through.
- Consumer durables demand progression: Extent of RAC demand pickup during peak summer months with current early momentum and impact of elevated input costs on W&C demand.
