InvestorQ : Is it true that Q1 results are showing pain in the auto and FMCG space?
NISHA Nayak made post

Is it true that Q1 results are showing pain in the auto and FMCG space?

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Priyanka N answered.
4 months ago
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Both FMCG and autos have had a similar set of problems in this quarter. They had to put up with higher input costs during the quarter with most agri inputs, oil related inputs and metal inputs hit by inflation. FMCG companies passed on price hikes and tweaked inventories for efficiency gains. The good yoy growth was largely on account of the low base effect because sequentially most of the stocks are down due to the COVID 2.0 effect.

If I was to sum up the results till now then the outperforming sectors are IT and metals. However, banking and NBFCs are NPA stress and insurers have seen record claims. These 3 sectors take up 45% of the Nifty. Then, autos and FMCG are facing input cost challenges and consumer demand issues due to COVID 2.0. The cost cutting leeway has been more or less exhausted in the last 3-4 quarters and that appears to be becoming less relevant now.

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