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Rising prices likely to moderate white goods demand: MOFSL
TIWN
Rising prices likely to moderate white goods demand: MOFSL
PHOTO : TIWN

New Delhi, May 22 (TIWN) Rising prices due to high commodity costs is expected to moderate demand for white goods, said Motilal Oswal Financial Services (MOFSL)

According to MOFSL, price increase of 5-10 per cent by companies across most categories have somewhat cushioned gross margins but will dampen the demand.  "The primary reasons for this are the large ticket sizes of the product categories vis-a-vis other product categories and the availability of substitutes," the report said.  "Price increases of 5-10 per cent taken by companies across most categories have somewhat cushioned gross margins."  Besides, high commodity prices took a toll on companies' gross margins in 3QFY21 and 4QFY21.  Furthermore, it said that although commodity costs weighed on gross margins, the EBITDA margins of most companies expanded by sustained cost rationalisation in employee expenses and reduced discretionary spends in other expenses, particularly ad spends.

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