Indian Multiplexes have witnessed a healthy rebound in performance in YTD FY2023, evidencing that the “Cinema Experience” continues to have a pull on the consumers. ICRA expects the multiplex industry revenues to surpass pre-pandemic levels by 6-8% in FY2023. Increasing footfalls, higher average ticket price, higher spend per head on food and beverages and recovery in advertising business, will support improvement in profitability margins, however these are likely to see a gradual recovery and touch pre-pandemic levels only in FY2024. A steady improvement in cash flows available with the industry will support debt servicing/capex. The credit profile of multiplexes is expected to improve as they consolidate to leverage their scale and gain market share at the expense of single-screen owners. Volatility in content quality, especially in the wake of increasing competition from digital Over-the-top platforms, remains a key challenge for the industry over the near-to-medium term.
With range-bound prices supporting urban demand, the jewellery retail industry registered a healthy growth of ~60% in Q2 FY2023 compared to pre-Covid levels (Q2 FY2020). While the sector has recorded robust sales in the Dussehra and Diwali seasons, high domestic inflation, cautious consumer sentiments and weak rural economic recovery are likely to constrain demand in the near term with the sector expected to contract by ~10% YoY in Q3 FY2023, albeit on a high base. Consequently, the industry is expected to grow at ~12% in FY2023. The organised jewellery retailers are likely to outperform the industry with ~20% YoY revenue growth in FY2023 driven by continued store expansions and tailwinds from market share gains, supported by a favourable regulatory environment.
Raw milk prices have continued to rise in the current fiscal, owing to rising cattle feed and fodder prices. Moreover raw milk availability was constrained in the first half of the fiscal owing to impact of Lumpy Skin Disease on milk production. Moreover, dairy players' cost structures have further been impacted owing to rising transportation and packaging costs. To combat the cost pressures, players have been hiking retail prices. Given the high demand for dairy products, raw milk prices will remain firm and retail price hikes are expected to continue.
With mismatch in deposit and credit growth likely to continue in coming months, the daily
average liquidity deficits are expected to widen further unless supported by
intervention from the Reserve Bank of India (RBI).
While the hike of 190 basis points (bps) in repo rate in H1 FY2023 was largely passed
on to the borrowers linked to external benchmarks, the transmission of the
hike in policy rates in the 1-year marginal cost of funds based lending rate
(MCLR) stood at 71 bps while the increase in the 1-year term deposit rates was only
43 bps. However, competition for deposit mobilisation is likely to push the
overall deposit rates and, eventually, the overall cost of funds for banks leading
to moderation in the interest margins in coming quarters. The profitability
will however remain supported by benign credit cost outlook, though we will
remain watchful of the impact of rising interest rates on the asset quality of
The Cabinet Committee on Economic Affairs (CCEA) has increased the basic price of ethanol produced from C-heavy, B-heavy molasses and sugarcane juice by Rs. 2.75/ litre (or 5.9%), Rs. 1.65/litre (or 2.8%) and Rs. 2.16/litre (or 3.4%) respectively for the ethanol supply year starting December 2022. The prices are slightly higher than the relief amount announced by OMCs for ethanol effective from June 01, 2022, to November 30, 2022, resulting in change of C-heavy, B-heavy molasses and sugarcane juice by Rs. 1.57/ litre (or 3.3%), Rs. 0.16/litre (or 0.3%) and Rs. 0.56/litre (or 0.9%) respectively. ICRA expects that such increase would allow absorption of higher cane cost with increased SAP and FRP prices which would support the margin profile of integrated sugar companies.
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