• Fri. Dec 1st, 2023

Home Decor Companies

Everyone Loves Home Decor Companies

Investors should brace for lacklustre Q4 earnings from home decor companies

Investors would do well to not have high expectations from March quarter (Q4FY23) earnings of home decor companies. Analysts at Nuvama Research expect them to report flattish year-on-year (y-o-y) growth in topline as market remains arduous. “Q4FY23 numbers are likely to be unobtrusive, considering the sombre demand and last year’s high base,” said the Nuvama Research report dated 10 April.

Tile and wood panel companies are struggling with muted demand. For tile manufacturers, although gas prices have moderated, increased competitive intensity has meant that companies are spending on discount schemes and advertisement expenses amid subdued uptake.

For wood panel companies, rising MDF imports is said to be hurting domestic consumption. “MDF imports have seen a meaningful increase (at almost pre-Covid levels) on account of lower global MDF prices (lower demand in US and Europe) and easing supply chain challenges,” said analysts at JM Financial Institutional Securities Ltd in a report dated 11 April. The research house expects building material companies under its coverage to post a modest growth in volume, up 6% sequentially, in Q4FY23.

For plastic pipe companies, realizations are likely to hit by fall in PVC prices.

Analysts at Antique Stock Broking Ltd note that after a volatile Q3, PVC prices increased Rs2/kilogram in January and declined Rs3/kilogram in the past fortnight of March. This price cut has led to channel destocking.

“Realizations are expected to maintain a positive growth trend on sequential basis, partially offset by mix deterioration due to higher share of agri volume during the quarter. On year-on-year basis, we expect realizations to decline 12%–22%,” added the Antique report.

Meanwhile, things look bleak on the margin front as well. “Ebitda for the coverage companies expected to fall 10% y-o-y, with wood panel segment witnessing the highest Ebitda contraction of 15% y-o-y amidst elevated timber costs, import threats for MDF and particle board,” said the Nuvama report. Ebitda is short for earnings before interest and tax.

Know your inner investor
Do you have the nerves of steel or do you get insomniac over your investments? Let’s define your investment approach.

Take the test

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint.
Download The Mint News App to get Daily Market Updates.



By admin

Leave a Reply

Your email address will not be published. Required fields are marked *