Commodity Costs Continue To Head North: Nirmal Bang
A coil of red hot wire rod cools at the steel mill. (Photographer: Andrey Rudakov/Bloomberg)

Commodity Costs Continue To Head North: Nirmal Bang

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

Our channel checks as well as management commentaries of consumer durable sector suggest that demand has been reasonably good in Q4 FY21.

However, the headwinds of rising commodity and transportation costs continue to pose a challenge for the industry.

While the industry has taken price hikes of 5%-8% on an average in Q4 FY21, if the commodity prices stay elevated than it would necessitate another round of price hikes in Q1 FY22.

The key trends highlighting these headwinds are as follows -

Prices of commodities such as copper, aluminium, zinc, steel and plastic compounds started to rise from July-August 2020.

By December 2020, these prices were at a highly elevated levels and have continued to head north in Q4 FY21 as well.

Click on the attachment to read the full report:

Nirmal Bang Consumer Durables Sector- Sector Update- 22 March 2021.pdf

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