India Consumer Discretionary: Growth Slowing on NBFC Liquidity Tightness, Demand Softness

India Liquidity Update: Widening Crisis of Confidence, NBFCs and Developers Struggle for Liquidity

Value investor- India mid & small caps

Bhaskar Chakraborty

Thematic (Sector/Industry)

India Consumer discretionary / Thematic (Sector/Industry)

<ul>
<li>Bank lending to NBFCs has been flat since Oct-18 after rising by ~ Rs 1 tn in the previous 5-month period. Debt mutual fund holdings in NBFCs have declined 20% over Sep-18 to Feb-19. CP issuances by NBFCs have also fallen to a fraction of the size before IL&amp;FS defaulted.</li>
<li>This is percolating through the economy slowing down the flow of overall credit.</li>
<li>2-W channel inventories are nearly twice the normal level for some players</li>
<li>M&amp;HCV production has been cut 20-25% YoY in 4QFY19</li>
<li>Tractor volume growth is likely to be in single digits in FY20</li>
<li>Air conditioner and refrigerators are seeing steep discounting owing to large inventory build-up on delayed summer</li>
<li>FMCG players indicate both rural and urban demand weakness including in the modern retail segment</li>
</ul>


Bank lending to NBFCs has been flat since Oct-18 after rising by ~ Rs 1 tn in the previous 5-month period. Debt mutual fund holdings in NBFCs have declined 20% over Sep-18 to Feb-19. CP issuances by NBFCs have also fallen to a fraction of the size before IL&amp;FS defaulted.
This is percolating through the economy slowing down the flow of overall credit.
2-W channel inventories are nearly twice the normal level for some players
M&amp;HCV production has been cut 20-25% YoY in 4QFY19
Tractor volume growth is likely to be in single digits in FY20
Air conditioner and refrigerators are seeing steep discounting owing to large inventory build-up on delayed summer
FMCG players indicate both rural and urban demand weakness including in the modern retail segment


Johnson Controls-Hitachi Air Conditioning India (JCHAC IN)

Johnson Controls-Hitachi Air Conditioning India

India Consumption: More Signs of a Widening Slowdown