As Philip Fisher said: Getting a reality check directly from people associated with co. gives us "much deeper" insights☝️v/s just reading reports & financials
Here's a🧵on Scuttlebutt insights on 6 key industries:
FMCG (ITC, Emami), Cigarette, Cement, BFSI, Textile & Paint
1/n
Here's a🧵on Scuttlebutt insights on 6 key industries:
FMCG (ITC, Emami), Cigarette, Cement, BFSI, Textile & Paint
1/n
Industry 1) FMCG
↪️ ITC is making new highs & now everyone’s fav stock🙂Wondering what changed? This:
Packaged food seg. doing well:
- Aashirvaad saw healthy growth with ~4% price hike
- Yippee gained market share from Maggi🏆
- Biscuit & bingo: Decent performance
2/n
@dmuthuk
↪️ ITC is making new highs & now everyone’s fav stock🙂Wondering what changed? This:
Packaged food seg. doing well:
- Aashirvaad saw healthy growth with ~4% price hike
- Yippee gained market share from Maggi🏆
- Biscuit & bingo: Decent performance
2/n
@dmuthuk
↪️ Emami & Zydus wellness:
- Rural demand remains weak
- Poor traction in summer products & Balm portfolio
Still, there's a sign of relief among dealers in this segment till the time Jiomart doesn’t enter this space
3/n
- Rural demand remains weak
- Poor traction in summer products & Balm portfolio
Still, there's a sign of relief among dealers in this segment till the time Jiomart doesn’t enter this space
3/n
Industry 2: Cigarette 🚬
- Cig. volumes recovered to pre-covid levels driven by premium segment
While ITC is already a leader here (market share ~78%), to further gain expand, it launched 4 new brands of cigarettes- Players, Gold Flake Mixpod, Classic Connect & Indie Mint
4/n
- Cig. volumes recovered to pre-covid levels driven by premium segment
While ITC is already a leader here (market share ~78%), to further gain expand, it launched 4 new brands of cigarettes- Players, Gold Flake Mixpod, Classic Connect & Indie Mint
4/n
Trade terms improving in ITC under leadership of Mr. Lahiri (CEO- cig biz)
- Dealers are no longer given impractical sales targets & focus is on maintaining competitiveness & visibility
Competitors- GPI & VST trying to make a comeback by launching aggressive schemes
5/n
- Dealers are no longer given impractical sales targets & focus is on maintaining competitiveness & visibility
Competitors- GPI & VST trying to make a comeback by launching aggressive schemes
5/n
Industry 3: Cement
- Dealers are +ve on-demand recovery in H2'23 driven by infrastructure projects
- Broadly, co's in all areas might take price hikes due to cost pressures but co's in the north are expected to have better profitability
6/n
- Dealers are +ve on-demand recovery in H2'23 driven by infrastructure projects
- Broadly, co's in all areas might take price hikes due to cost pressures but co's in the north are expected to have better profitability
6/n
- Adani’s entry in the industry will have least impact on southern market as it has negligible exposure there. Distributors from the other regions are not very sure about the impact.
Also, promoter buying is happening across more than 10 companies in the cement industry🙌
7/n
Also, promoter buying is happening across more than 10 companies in the cement industry🙌
7/n
Industry 4: BFSI💰
↪️ Payments: Groundwork to be done in UPI linking with credit cards so it will take time
- For seamless transactions & avoiding frauds, MDR in UPI needed (will drive up Paytm's sales)
- BNPL can work out really well if the cost of funds is reasonable
8/n
↪️ Payments: Groundwork to be done in UPI linking with credit cards so it will take time
- For seamless transactions & avoiding frauds, MDR in UPI needed (will drive up Paytm's sales)
- BNPL can work out really well if the cost of funds is reasonable
8/n
↪️Microfinance:
- Experts expect bad Q1FY23 due to new regulations
-In May'21 loans were disbursed to 72lakh customers v/s 9.6 lakh in May'22
- Asset quality is expected to be decent. Collection efficiency- 99%
- Loan rejection rates fell to 15% from 21% a few months ago😲
9/n
- Experts expect bad Q1FY23 due to new regulations
-In May'21 loans were disbursed to 72lakh customers v/s 9.6 lakh in May'22
- Asset quality is expected to be decent. Collection efficiency- 99%
- Loan rejection rates fell to 15% from 21% a few months ago😲
9/n
Industry 5: Textiles👚
- Co's suffering from high cotton prices & low inventory with spinning mills
- Industry experts are forecasting this to sustain till Oct i.e. till the time cotton’s new supply arrives in the market
- Mills aren't able to pass on high input costs
10/n
- Co's suffering from high cotton prices & low inventory with spinning mills
- Industry experts are forecasting this to sustain till Oct i.e. till the time cotton’s new supply arrives in the market
- Mills aren't able to pass on high input costs
10/n
Industry 6: Paint industry🎨
- Compelling demand: Paint volumes are up 10% v/s 2019 in spite of 25% price hikes in the last 9 months
- This is due to a solid pickup in the construction of homes. Especially premium products getting high traction
11/n
- Compelling demand: Paint volumes are up 10% v/s 2019 in spite of 25% price hikes in the last 9 months
- This is due to a solid pickup in the construction of homes. Especially premium products getting high traction
11/n
Asian Paints seizing the market share by introducing economy range products & dedicated team
- Also introduced many lucrative schemes across waterproofing & putty segments
Competitors- Akzo Nobel, Berger paints & Kansai Nerolac are struggling to retain the market shares
12/n
- Also introduced many lucrative schemes across waterproofing & putty segments
Competitors- Akzo Nobel, Berger paints & Kansai Nerolac are struggling to retain the market shares
12/n
Credits & Source of the Ground research- Phillip Capital (Road less travelled report)
13/n
13/n
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