Q4FY22 Result Preview - Consumer Discretionary - ICICI Direct

We expect the I-direct consumer discretionary universe likely to report slower revenue growth of ~8% YoY in Q4FY22 mainly due to high base (+41% in Q4FY21) and lower volume offtakes. Volume offtake of coverage companies is likely to decline in the range of 7-12% on account of pre price hikes inventory built by dealers in Q3 and lower demand amid pandemic led restrictions. Sector wise, paint companies are likely to report revenue growth in the range of 7-9% YoY led by price hikes of ~21% taken during 9MFY22. On the fast moving electrical goods (FMEG) front, the coverage companies are likely to see revenue growth in the range of 5-9% driven by price hikes of about 15-17% in 9MFY22. We believe extended winter and pandemic led restrictions have restricted volume offtake of cooling products. Under our coverage, Voltas is likely to be adversely impacted with RAC volume de-growth of ~4% YoY in Q4FY22. Other FMEG companies such as Havells, Bajaj Electricals, Crompton Greaves Consumer are also likely to report volume de-growth of 9-10% mainly due to higher base and low rural demand. On the piping front, we believe low dealer inventory and softening of PVC prices would have helped demand revival in Q4. Under our coverage, Supreme Industries, Astral are likely to report piping segment revenue growth of 11%, 15% YoY, respectively, led by volume growth of 9-11% YoY in Q4FY22. While YoY numbers are likely to be muted, on a two year CAGR basis the companies are likely to grow 23% supported by robust demand despite various supply related challenges.

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Source : Equity Bulls

Keywords

ConsumerDiscretionary Q4FY22 ResultPreview ICICIDirect