Consumer Durables share price target

Both Titan and Kalyan reported decent demand prints in 3QFY23 update. Titan’s jewellery performance of ~11% YoY growth in revenues was similar to Kalyan’s (standalone) revenue growth of ~12% YoY.

Strong base (due to channel up-stocking prior to ~20% price hike in Nov- Dec’21) and steep inflation have impacted volume growth in Q3FY23. Mismatch of Diwali on YoY basis and prolonged monsoon also impacted volumes.

Consumer Durables - Q3FY23 - Earnings Preview

Q3 to remain lacklustre on muted demand post festive season and little scope for price hikes

Paint dealers expect price cuts from paint companies over the next 2-3 months with fall in crude oil prices. They want to work with minimum possible inventory.

Paint dealers indicated that primary sales were impacted materially (declined for some dealers) in Oct-Nov’22 as there was trade up-stocking in base quarter due to ~22% price hike, however, consumer off-take has remained largely stable - that's the insight from our conversations with dealers in Mumbai.

We expect the white goods and durables sector to report weak revenues in Q3FY23E due to: (1) post Diwali slowdown in consumer offtake due to steep price hikes, inflationary pressures and higher interest rates.

The Ministry of Finance has rolled back the export duties imposed on steel in May’22 (Link), to likely promote exports from India. Higher demand for steel products from International markets might shoot domestic steel prices upwards.

New Gujarat electronics policy aims to build an ecosystem for electronics manufacturing in India and enable import substitution