6 Stocks To Buy From The Consumer Durable And White Goods Space From ICICI Securities

ICICI Securities has identified shares of six companies that investors can buy while doing an industry coverage report on consumer durable and white goods space. The securities firm believes that these companies share price can grow potentially between 17.32% to 60.71%. Here are the details.

In the report, the securities firm mentioned that they are positive on the white goods and consumer durable sector as there seems to be no relativity of heat waves in India and revenue growth of fan, cooler, air conditioner and refrigerator companies. "On analyzing the heat waves in past three decades (FY92-FY22) and revenue growth of summer product companies (Fan, Cooler, Air conditioner, Refrigerator), we note the data does not indicate any such trend that revenue growth in heat wave years is higher than non-heat wave years. There is no positive or negative correlation. We have also analyzed the data in three long-period intervals of 10 years over FY92-FY22. There were three heat waves during FY92-FY02, no heat wave during FY02-FY12 and four heat waves during FY12-FY22. We note the revenue CAGR for summer product companies was highest during FY02-12 when there was no heat wave. While 'heat wave will lead to higher revenue growth for fan, cooler, air conditioner and refrigerator' companies may sound like a good narrative, the historical data does not support such hypothesis."

Following are the details of the six companies recommended

Company name	Latest market price (Rs/ share)	Target price (Rs /share)	Potential Upside (%)
3M India Ltd	23,421.15	27,400	17.32
Whirlpool Of India Ltd	1,338.85	1,600	22.04
Syrma SGS Technology Ltd	279.45	325	22.18
TTK Prestige Ltd	754.75	1,000	29.2
Havells India Ltd	1,224.55	1,550	29.49
Crompton Greaves Consumer Electricals Ltd	315.45	495	60.71

According to the report, ICICI securities has valued stocks based on DCF methodology and indicated the key risks "We value stocks in white goods and durables market on DCF methodology (WACC and TG ranging from 10-13% and 3-6%, respectively). Key upside risk: Better-than expected gross margins due to correction in input prices. Key downside risks: Unexpected irrational competition due to deceleration in general consumption demand, and steep inflation in input prices.

Disclaimer:

The stocks have been picked from the brokerage report of ICICI Securities, Greynium Information Technologies and the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.