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India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
● We conducted a survey of over 30 companies in India to identify
consumption spending trends during the festival season. The
festival season in India varies across various states, with Onam in
Kerala, Ganesh Utsav in Maharashtra, etc.; however, the 45-day
period before Diwali is widely recognised as the most celebrated
festival period across the country.
● The importance of festival seasons varies across sectors, as they
lead to an increase in sales, from 15–20% in automobiles and
kitchen appliances to an increase of ~100% in some segments
such as jewellery, white goods, travel, paints and apparels.
● Despite the fact that most companies, especially the ones relying on
urban consumption and segments where financing is critical, have
had a difficult last few months; managements remain bullish that the
festival season would change things, and thus, have built inventories.
● Our channel checks with auto companies suggest robust volumes
for two-wheeler companies but no significant YoY growth for car
companies in the festival season.
We conducted a survey of more than 30 Indian companies in the
consumer discretionary space. The survey was designed to gauge
whether there is a broad-based slowdown in consumer spending in
India and to ascertain the importance of the festival season for various
consumption segments. The questions were centred around the share
of revenues from the festival season, the impact of the current
adverse macro-environment on sales in the current festival season,
experiences from previous slowdown years (2001, 2008). Festival
season is quite important for most companies’ plans and any
slowdown during this time would significantly impact their earnings.
Two wheelers. Two-wheeler volumes have been the most resilient in
the current fiscal, having grown at a healthy >15% levels. The
companies typically maintain an inventory of two weeks, which goes
up to four weeks before the festival season in anticipation of demand
surge. Our channel checks suggest that retail sales during the festival
season have been robust despite the tough macro environment.
Passenger vehicles. The third quarter is generally the best for the
passenger car industry. While effects of slowdown were visible in
2008, with sales reducing to nearly half of normal levels, this time
around, companies are much more optimistic. They have not
observed a drop in enquiries, and unlike 2008, the number of
customer enquires has not declined. Currently, many models,
especially diesel engine variants have a waiting period. The normal
level of inventory maintained by a car company is three weeks, which
jumps to four weeks during the festival season.
Despite slowdown, companies remain optimistic. After a difficult
last few months, most companies are quite bullish about the current
festival season. Almost all the companies that we surveyed are
expecting a robust festival season and have ramped up their
production and inventory.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
● We conducted a survey of over 30 companies in India to identify
consumption spending trends during the festival season. The
festival season in India varies across various states, with Onam in
Kerala, Ganesh Utsav in Maharashtra, etc.; however, the 45-day
period before Diwali is widely recognised as the most celebrated
festival period across the country.
● The importance of festival seasons varies across sectors, as they
lead to an increase in sales, from 15–20% in automobiles and
kitchen appliances to an increase of ~100% in some segments
such as jewellery, white goods, travel, paints and apparels.
● Despite the fact that most companies, especially the ones relying on
urban consumption and segments where financing is critical, have
had a difficult last few months; managements remain bullish that the
festival season would change things, and thus, have built inventories.
● Our channel checks with auto companies suggest robust volumes
for two-wheeler companies but no significant YoY growth for car
companies in the festival season.
We conducted a survey of more than 30 Indian companies in the
consumer discretionary space. The survey was designed to gauge
whether there is a broad-based slowdown in consumer spending in
India and to ascertain the importance of the festival season for various
consumption segments. The questions were centred around the share
of revenues from the festival season, the impact of the current
adverse macro-environment on sales in the current festival season,
experiences from previous slowdown years (2001, 2008). Festival
season is quite important for most companies’ plans and any
slowdown during this time would significantly impact their earnings.
Two wheelers. Two-wheeler volumes have been the most resilient in
the current fiscal, having grown at a healthy >15% levels. The
companies typically maintain an inventory of two weeks, which goes
up to four weeks before the festival season in anticipation of demand
surge. Our channel checks suggest that retail sales during the festival
season have been robust despite the tough macro environment.
Passenger vehicles. The third quarter is generally the best for the
passenger car industry. While effects of slowdown were visible in
2008, with sales reducing to nearly half of normal levels, this time
around, companies are much more optimistic. They have not
observed a drop in enquiries, and unlike 2008, the number of
customer enquires has not declined. Currently, many models,
especially diesel engine variants have a waiting period. The normal
level of inventory maintained by a car company is three weeks, which
jumps to four weeks during the festival season.
Despite slowdown, companies remain optimistic. After a difficult
last few months, most companies are quite bullish about the current
festival season. Almost all the companies that we surveyed are
expecting a robust festival season and have ramped up their
production and inventory.
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