BQ Prime'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 BQ Prime's subscribers an opportunity to expand their understanding of companies, sectors and the economy.
ICICI Securities Report
We remain structurally positive on white goods and durable sector owing to strong return ratios, healthy growth potential and lower penetration levels.
Migration from unorganised to organised sector is likely to turn beneficial for the industry.
Also, the focus on premiumisation should boost profitability of companies in the sector.
Havells India Ltd., with the most diverse product portfolio and higher thrust over premiumisation, remains our top pick.
Key risks: Higher-than-expected rise in raw material prices, and irrational competition.
Trends from interaction with companies and channel checks in August-September 2023:
Demand traction in business-to-business has remained strong,
signs of business-to-consumer demand improvement are visible partly on a favourable base YoY,
fans segment has likely benefitted the most whereas lighting segment continues to be under pressure.
The deflation in lighting prices continues. The reduction in trade inventory with changes in technology and price deflation has continued in Sep-23.
On raw material front, steel and high-density polyethylene remain in deflationary zone while copper and crude prices are up 12.5% and 9% YoY, respectively. Higher footfalls at large retailers indicate likely acceleration in festive demand.
We model margin expansion in FY24E in-spite of increase in ad-spend and research and development spends.
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