Consumer Discretionary Q1 Results Preview - Healthy Growth Led By Price Hikes, Favourable Base: ICICI Direct
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ICICI Direct Report
In Q1 FY22, consumer discretionary companies are likely to report strong YoY revenue growth of 51% on a lower base and price hikes taken during the quarter.
Unlike last year (in Q1 FY21), the lockdown restrictions in the current year are not very stringent. It has mostly affected May 2021 sales. Hence, on a YoY basis, the companies are expected to clock better sales. However, the same is around 80-90% of their pre-Covid sales.
Paint and fast moving electrical goods companies have taken a price hike in the range of 3-12%. The price hikes of piping companies are even sharper to the tune of ~55%.
Pent up demand, continuance of construction activities amid lockdown, inventory build-up at dealers’ level, delayed monsoons and price hikes are expected to result in strong revenue growth for CD companies in Q1FY22.
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