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Mr. Mayank Bhandari – Research Analyst at Prabhudas Lilladher.
Quick Pointers:
– March month saw strong growth led by pre-buying across categories
– AC demand strong, other whitegoods likely to pick up in wedding season
– Inflationary pressures impacting demand in rural areas
Our channel check suggests that March saw strong growth in most of the categories led by increased stocking by dealers/retailers in anticipation of sustained price increase. After two consecutive bad summers, we have seen strong offtake in air conditioner category even as demand for air-cooler remain soft. In whitegoods, demand for Direct cool (DC) refrigerator category remains muted; whereas there is continuous shift towards premium products (Frost Free Ref, front load washing machine). Channel feedback suggest that rising inflation may adversely impact demand in appliances and white goods. Demand remains muted in rural India given increased prices in basic categories across all products (particularly in fans).
We maintain Crompton consumer as our top pick given strong market position in core categories, expected synergy gains from butterfly acquisition and attractive valuation (28x FY24 EPS). Voltas will be a key beneficiary of strong AC demand, in our view. We retain hold on Voltas as Volt-Bek JV continues to be under investment phase and ramp-up is slower than expectations, in our view.
Source : Equity Bulls
Keywords
ConsumerDurables
ChannelCheck
PrabhudasLilladher
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