Every month the Govt of India publishes a data known as Index of Industrial Production (IIP). This is published on 12th of every month (6 weeks lag). IIP is a composite indicator that measures the short-term changes in the volume of production of a basket of industrial products during a given period vs. that in a chosen base period. It is a key indicator of India’s economic development.

IIP is classified under Broad sectors such as manufacturing, mining and electricity with weightage of 78%, 14% and 8%, respectively. IIP is also classified under Use based sectors such as Primary Goods, Capital Goods, Intermediate Goods, Infra/ Construction Goods, Consumer Durables and Non Consumer Durables with weightage of 34%, 8%, 17%, 12%, 13% and 15%, respectively.

Now let’s look at some data. IIP General Index (attached below) over the years has increased from 103 in FY13 to 147 in FY24. Currently, it stands at 150 (Jun’24).

Now after tracking this monthly data, we came across the data of Consumer Durables Index (attached below). After making a low of 107 in Nov’23, the index grew to 115 in Dec’23 and to 122 in Jan’24 which was not the case in last year (2022).

Now this got me thinking, which are the leaders in the listed consumer durable space. So I scanned across categories and came across few cooling companies like Voltas, Blue Star, Whirlpool, Johnson Controls Hitachi, Symphony etc. which fall under the Consumer Durables category. Except Blue Star, all companies were facing some issues and were available at a lucrative valuation.

Monthly Index of Consumer Durables

Annual Index of Consumer Durables

After identifying this upward trend in IIP Consumer Durable Index, Voltas gave a return of ~78%, followed by Symphony at ~75%, Johnson Controls Hitachi at ~69%, Whirlpool at ~66%, Blue Star at ~60% between a period of Jan-Aug’24 (8 months). In the next article, we will discuss about why Voltas performed exceedingly well and the thesis behind the same.