Consumer Durables share price target

We visited Raipur (in Chhattisgarh) and interacted with several regional sales managers, area managers and distributors of retail/QSR/FMCG companies to gain first-hand insight on their business (at store level) and evolving competitive landscape.

Q4FY23: Consumer Durables Preview

We estimate paint industry volumes to have grown 8-10% YoY in Q4FY23. We reckon revenue growth = volume growth (interplay of price hikes and discounts). There has been a likely deterioration in revenue mix due to: (i) higher revenue from projects business and industrial paints, and (ii) down-trading.

Both Titan and Kalyan reported decent demand prints in 4QFY23 update. Titan’s jewellery revenue growth of ~23% YoY was higher compared to Kalyan’s (standalone) revenue growth of ~16% YoY. We believe the base quarter for Tanishq (on like-to-like basis) has been more severely impacted by Omicron-led disruptions (vs Kalyan) as Tanishq's retail presence is over-indexed in non-south and metro cities.

In this report we attempt to identify pockets of likely short-term outperformance in apparel retail sector from the near-term perspective in light of inflation, high interest rates and general slowdown in discretionary consumption.

The dealer count has likely increased 2x in last 3-4 years in Chennai. While it has resulted in higher paint sales, it has impacted revenue/dealer - that's the insight from our conversation with the paint dealers in Chennai.