BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Nirmal Bang Report
Sequential inflation continues to delay the margin recovery course for consumer companies (especially fast moving consumer goods) even as they have taken incremental price hikes. We believe, the environment is quite volatile to take a call on full-year margins and will have to be monitored on a quarterly basis.
In term of Q4 FY22, most consumer companies will see sequential pressure on operating margins as cost-saving measures won’t be enough to fully offset elevated raw material prices (which we believe will range ~10-15% on QoQ basis and ~50% on YoY basis for key inputs in FMCG commodity basket based on the data available).
Further, the ongoing geopolitical environment has made the situation extremely unpredictable. As per various media reports and management interviews, companies have taken multiple rounds of price hikes, although cumulatively they remain incommensurate with input cost inflation.
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