Entry level consumer electronics sales face inflation headwinds

News: According to The Economic Timew, the entry level consumer durables sales declined 40% MoM in June 2022 amid higher inflationary pressure

Views: Sequentially, Q1 growth is softer over Q4 as inventory build-up generally happens in the period. However, we do believe, the continuous price hikes (~3-5%) in Q1FY23 over and above ~20% price hikes in FY22 has impacted the volume growth of entry level products in June. However, we also believe sharp reduction of metal prices from its peak is likely to help companies limit price hikes for the rest of the year. This is likely to help demand recovery from H2FY23 onwards

Impact: Neutral