Consumer Discretionary Q3 Preview - Demand Slowdown, High Inflation To Weigh: ICICI Direct
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ICICI Direct Report
In Q3 FY22, our consumer discretionary universe is likely to report revenue growth of ~10% YoY driven by price hikes in the range of 7-20%. The aggressive price hikes and higher base (due to strong pent up demand in Q3 FY21) would restrict volume offtake in rural and semi urban regions.
On the fast moving electrical goods front, demand slowdown was witnessed in the air conditioners and small appliances (such as water heater) categories mainly due to untimely rains in the various geographies.
On the piping front, PVC piping demand was impacted in rural regions primarily due to sharp price hikes. On the paints front, we believe, despite a higher base, paint companies are likely to report volume growth of 7-8% mainly due to pre-buying activity at dealer’s front in the fear of price hikes.
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