Household & Personal Products:Dabur India A.K. Jain – VP Financesaid in a press release:
Demonetization of high currency note initiated by the government on 8th November, 2916 is a positive move for the economy and industry and will lead to better transparency and compliance in the medium to long run. This will be beneficial for organized FMCG players creating a level playing field. However, on account of scarcity of cash available with customers and traders, we foresee some near term pressures on the company’s business. The impact varies across channels and geographies, and stress is highest for wholesalers and small town grocery shops who are facing a severe liquidity crisis and are destocking.
The impact is likely to be positive on modern trade outlets and plastic money enabled retailers who are likely to benefit from this change. On account of continuity of current uncertain situation it is difficult to quantify the impact for Q3 FY16-17 at this point of time, however it is temporary in nature and situation will improve with increase in availability of new currency. In the meanwhile, we are focusing more on modern retail, e-commerce and institutional sales and also encouraging our general trade (GT) retailers to adopt cashless payment systems. This will help in mitigating the overall impact of demonetization and pave the way for normalization in the next few months.
Khushru Jijina – Managing Director, Piramal Fund Managementadded:
Consolidation happening in real estate sector
If one ignores the sentiment for the short-term which is three months to six months, our house view is that obviously, these people (Tier-1 developers) are going to thrive as they always deal in cheque and not in cash
Indore, Jaipur, Ahmedabad are the regions where the cash element is pretty high and sales their are going to be affected
Developers who are in the parlance were using unauthorized construction means their entire project is cash, are going to be in severe trouble
Tier-II cities will see prices coming down and under pressure
RERA clubbed with demonetization is accelerating the death of the non-organized sector
Tier-II cities where we do not operate at all, I do see prices coming under pressure
Definitely do not see prices crashing because the margins have been reduced in the last few years
Approvals will get affected in the short-term. Long term approvals would continue. Because at the end of the day you cannot have a system where the approvals are not given at all, it has to, it will get escalated at some point or the other.
Wide expectation of taxes coming down in the budget
Lodha is our client who does Rs. 200 crores per week, have just finished last two weeks of Rs. 100 crores each so, it is no mayhem as people think, the mayhem is in Tier-II please.
De-monetization will completely remove the cash component which was involved in the high value transaction properties and that was what was existing more in two tier cities as well as properties around Metros
No impact on the service class and the middle-income group people
De-monetization will help the real estate industry to groom up and to come in a format where it would be more easily understandable to people and the myth about that each and every transaction has and had a lot of cash component would be eliminated to a larger extent
After effects of de-monetization undoubtedly would be that land prices will have to drop down
Temporary inconvenience to the public which is happening there would be lay back for one and half month – two months. So, we see no more large price reduction would happen – a bit of correction, may be to an extent of 2% to 5% depending upon the prices and its location and the competition
The enquiries from the customer’s side have completely dropped down to zero as our call centers also are not ringing
De-monetization has led to temporary parking of money in real estate which would stop post January 1st – luxury segment
Beverages – Wineries & Distilleries: Globus Spirits Mr. Ajay Kumar Swarup – Managing Director; Mr. Shekhar Swarup – Executive Director; Dr. Bhaskar Roy – Executive Director & COO and Mr. Ajay Goyal – CFO in a concall:
In the near term we anticipate slowdown in demand owing to the liquidity crises faced by the end consumer due to demonetization of old currency notes
On the consumption side, demonetization has not had too much of an impact right now
There has been initial few days of concern but considering the fact that IMIL is quite a low priced product and I do not think our consumers are using the old high denomination notes to pay for our products
This is the time of year when the consumption is picking up. So in fact, if you look at the data, there is not a decline in consumption in the last few days
High consumption period is yet to come and we will see that towards the end of November and possibly full December and January
Spoken to a few dealers yesterday also, they are saying that the supply is going on and they somehow anticipate that there will not be much problem
There is no problem in raw material, there has been no impact on raw material, there has been no impact on transportation of products.