Demonetization Impact : Industry Comments Part IV : Delayed Consumption?

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what-listed-companies-are-saying-about-the-demonetization-impact


We record what companies have said about the impact of the demonetization (announced on 8-Nov) of Rs. 500/1000 notes to their business. This is a live post – more reactions will come as we see them.

Part 1: What Listed Companies Are Saying About The Demonetization Impact

Part 2: Demonetization Industry Comments: Cements See Contraction, Automobile Slowdown, Low Impact on NBFCs

Part 3: Demonetization Impact : Industry Comments Part 3 : FMCG Still Jittery, Real Estate Could Drop

Today we cover a few more companies from Industries such as Apparel Manufacturing, Beverages – Wineries & Distilleries, Credit Services, Department Stores and more.

12-Dec

Credit Services: Bajaj Finance

bajaj-finance-logo

In its latest Investor Presentation shared the Effects of Demonetization:

  • Impact on CIBIL inquiry

    • Inquiries dropped drastically post the announcement public & private sectors banks being more pronounced.
    • While online traffic has increased, they have not come up to pre-announcement levels
    • Credit Card & Auto Loan inquiry volumes have increased beyond pre-announcement volumes
    • Other trade types continue to lag behind
  • Impact on deployments – Logins

    • 2W & 3W finance – Very slow demand post demonetization. 2W & 3W finance business has seen significant deterioration in current bucket portfolio owing to high dependency
      on cash collections.
    • Consumer durable finance – Have cut 18% business in Q3 FY17 as articulated in Q2 earnings call
    • Digital product finance – Have cut 35% business in Q3 FY17 as articulated in Q2 earnings call
    • Lifestyle product finance – Deep slow down in first 30 days
  • Impact on deployments – Disbursal

bajaj-finance-demonetization-impact-12-dec

9-Dec

Real Estate – General: DLF

dlf-logo

In its latest Investor Presentation shared the Effects of Demonetization:

DevCo: In the longer term, we believe that the demonetization shall be a positive for both the Company and all its stakeholders especially customers.

8-Dec

Beverages – Wineries & Distilleries: Pincon Spirit

pincon-spirit-logo

In its latest Investor Presentation shared the Effects of Demonetization:

  • Reduced value – From adequate currency into handful legal tender
  • Increased anxiety – Consumer sentiment affected, moderating spending
  • Enhanced stress – Limited resources to manage household and business operations
  • The common perception: reduced discretionary spending

Demonetization Plus: Rs. 100 (continuing legal tender) currency largely used for our products. Most Pincon customers enjoy adequate volumes of Rs. 100 currency note.

Rubber & Plastics: Finolex Industries

finolex-industries-logo3

In its latest Investor Presentation shared the Effects of Demonetization:

  • Future Outlook: Though demonetization has created a temporary setback, the long term impact will be positive
  • Demonetization is likely to reduce the gap in primary and secondary market transactions.

6-Dec

Department Stores: Future Retail

future-retail-logo

In its latest Investor Presentation shared the Effects of Demonetization:

  • In order to support the liquidity, each of our Biz Bazaar POS were deployed to release new currency notes in a quick time frame
  • As an outcome of Demonetization, the share of modern retail trade increased substantially and we believe going forward, this event shall contribute favorably
  • Typically, card/wallet invoices are of higher value than the cash invoices, this might potentially increasing the overall sales value in future

28-Nov

Houseware: Borosil Glass Work

borosil-glass-works-logo

Mr. Shreevar Kheruka – Managing Director & Chief Executive Officer said:

  • In the short run we will have some impacts on the sales of products from a secondary and tertiary perspective. Eventually this is going to hit us on the primary sales also; however we do have furnace repair sometime in April-May of the coming year, so we are planning to run at full capacity because anyway we have to build stock for selling during the 2 months or so that the furnace is out of production. So we continue on full capacity and hope we are able to come up with ways to limit the impact of demonetization on sales of the organization.
  • With demonetization we do not know how real estate prices are going to move in terms of the valuation.

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