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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,
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