ADVERTISEMENT

ICICI Securities: Consumer Staples And Discretionary - Leadership Matters, New CEOs Are Positive For Stock Returns 

ICICI Securities: Consumer Staples And Discretionary - Leadership Matters, New CEOs Are Positive For Stock Returns

A shopper walks through an aisle displaying personal care goods at a Big Bazaar hypermarket, operated by Future Retail Ltd., in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)
A shopper walks through an aisle displaying personal care goods at a Big Bazaar hypermarket, operated by Future Retail Ltd., in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

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.

ICICI Securities Report

We analyse leadership changes in consumer companies over 2010-2020 and highlight instances of business turnarounds or performance improvements (in cases where it was ‘already good’).

We observe that consensus have recognised and rewarded Chief Executive Officer changes (stocks have returned 2 times (and more) in less than one year just based on the narrative).

It appears a simple template for alpha generation as the market is generous upfront. Looking forward, we provide a list of long-serving CEOs, which may be used for extrapolation about potential changes in future.

That said, consensus appears to follow a simple template of ‘immediate de-rating’, if it perceives a reversal of professionalism (exit of professional CEO and a family member taking over).

Click on the attachment to read the full report:

ICICI Securities Consumer Sector Update.pdf

DISCLAIMER

This report is authored by an external party. BloombergQuint does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the brokerage and do not represent the views of BloombergQuint.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.