White Goods And Durables Diary - Concern About Higher Input Prices Seems Overdone: ICICI Securities

Home appliances are displayed for sale at an appliance store in San Jose. (Photographer David Paul Morris/Bloomberg).

White Goods And Durables Diary - Concern About Higher Input Prices Seems Overdone: ICICI Securities

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

ICICI Securities Report

Our new monthly series on white goods and durables will have high frequency data – short-term demand trends, raw material prices, product price changes, key launches, management commentaries etc.

While consensus appears concerned over rising input prices and its impact on margins, our analysis of last decade’s performance suggests:

1. companies have (largely) maintained margins in a narrow range of 10-12% despite volatile input prices. The coefficient of variation (standard deviation / average margins) is also just ~10%,

2. white goods and durables are (mostly) problem-solution categories and hence, consumers may defer purchases. Consumption loss appears low. Hence, the price hikes have negligible impact on the volumes in medium-term, in our view,

Click on the attachment to read the full report:

ICICI Securities White Goods and Durables Diary.pdf

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