HDFC Securities: India’s Consumer Durables Looking Beyond Near-Term Disruption 
Customerslook at televisions at an eZone retail showroom in the Jayanagae area in Bangalore(Photographer Namas Bhojani/Bloomberg)

HDFC Securities: India’s Consumer Durables Looking Beyond Near-Term Disruption 

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

HDFC Securities Report

In the current unprecedented time, when Covid-19 has impacted all consumption categories, consumer durables have also witnessed immense pressure.

In such a phase, where earnings may see high volatility in the near term, we are trying to analyse the underlying strength of categories and companies. Our consumer durables universe has clocked 10 times and 18 times revenue and Ebitda in the past 17 years.

We believe the sector still has multi-year strong growth potential, which would be driven by (1) penetration, (2) product diversification, (3) market share gains, (4) shift from unorganised to organised, (5) high scope in rural and (6) largely untapped global opportunity.

The government’s consistent ‘Make in India’ push is further making the sector attractive, opening up various possibilities of manufacturing incentives. The sector is trading at 42 times price to earning (one-year forward), having seen a sharp rerating in the past 10 years (20 times in 2010).

Click on the attachment to read the full report:

HDFC Securities - Appliances Sector Thematic.pdf

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