Nirmal Bang: Consumer Sector Outlook - Renewed Focus On Costs Across Coverage Companies

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..Nirmal Bang Report.Even prior to Covid-19 the slowdown in consumption had prompted the consumer companies to make ‘moderation of costs’ as one of their key focus areas in order to protect profitability.Many companies had undertaken internal cost savings programs to help identify key line items where sustainable savings could be achieved.However, the pandemic has led consumer companies to revisit their cost structures again and expedite sustainable cost control efforts in order to improve profitability and conserve cash.While with the outbreak of Covid-19, companies have focused primarily on cutting back discretionary spends (some of these savings may sustain in the future), prior to the pandemic, they were focusing on the following to drive savings:1. technology and process automation 2. improving supply chain and logistics efficiencies and 3. optimization of input costs and procurement efficiencies.Even in Q1 FY21, in case of most FMCG companies, reduction of select operating costs (supported by a favorable input environment) either helped them to maintain or improve margins.Going forward, certain savings in operating costs, like travelling and other discretionary spends may sustain while advertisement and promotion expenses will increase sequentially..Click on the attachment to read the full report:.DISCLAIMERThis 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.

Nirmal Bang: Consumer Sector Outlook - Renewed Focus On Costs Across Coverage Companies

Nirmal Bang: Consumer Sector Outlook - Renewed Focus On Costs Across Coverage Companies

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