White Goods, Durables - Margin Expansion In H2 But To Be Lower Than Consensus Expectations: ICICI Securities
Ebitda margin expansion for white goods, durables in H2 FY23 due to steep correction in input prices,
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
While we model Ebitda margin expansion for the sector in H2 FY23 due to steep correction in input prices, we believe the margin expansion is likely to be lower than consensus expectations due to-
the ad-spend (as % of net sales) is likely to be higher after remaining low in FY21-22,
increase in freight cost will also hurt the margins and
we model the companies to invest in research and development and new product launches / relaunches. Also while the input prices corrected in Q1 FY23, they have remained largely stable in Q2 FY23.
The durable companies are required to pass on the benefits in commodity linked categories like cables and wires. Hence, we model the margins in these commodity linked categories to be weaker in Q2 FY23 and Q3 FY23 due to high priced inventory.
Click on the attachment to read the full report:
This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.