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Capital Goods, Consumer Durables Q1 Preview - Rising Input Costs To Affect Margins: Nirmal Bang

Capital Goods, Consumer Durables Q1 Preview - Rising Input Costs To Affect Margins: Nirmal Bang

<div class="paragraphs"><p>An employee works at the  air conditioner factory. (Photographer: Diego Levy/Bloomberg)</p></div>
An employee works at the air conditioner factory. (Photographer: Diego Levy/Bloomberg)

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

Revenue growth for capital goods and consumer durables sector in Q1 FY22 is expected to be robust due to a favourable base (Q1 FY21 was affected by a relatively more severe lockdown than in Q1 FY22).

In consumer durables, demand was strong till mid-April 2021 while June 2021 also saw a decent off-take.

Our channel checks suggest that demand in June-21 was affected by poor business sentiments amid expectations of a third Covid wave and reduction in stocking by channel partners/dealers.

In capital goods, we believe that the execution would be affected but it would be higher YoY as projects sites/construction sites were operational.

However, both the sectors are facing challenges such as steep rise in commodity prices, higher transportation costs (both overseas ocean freight and domestic transport) and shortage of imported components due to global shipping challenges.

Click on the attachment to read the full report:

Nirmal Bang Capital Goods Consumer Durables- Q1FY22 Result Preview -7 July 2021.pdf

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