Capital Goods, Consumer Durable Q3 Preview- Strong Order Booking, Festive Season To Drive Topline: Nirmal Bang

Nirmal Bang Report

In Q3 FY23, we are factoring in strong revenue growth for the capital goods companies (up 30.3% YoY) under our coverage on the back of robust order booking.

In the consumer durables segment, we believe that demand collapsed in Nov-22 after a good Oct-22 before recovering again from mid-Dec-22.

Consequently, we are building in 17.3% YoY topline growth for coverage consumer durables companies. For consumer electricals companies, we are building in 10.7% YoY topline growth, backed primary by channel filling of non-rated fans ahead of the impending transition to new BEE norms.

We also expect up-stocking of wires and cables by dealers and distributors as copper prices have risen by ~18% from July-22 lows.

Capital goods and consumer durables companies are expected to show margin improvement as most of the companies are most likely to have exhausted high-cost inventory by mid Q3 FY23.

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