Companies & Sectors
Margins to improve by 50 basis points in consumer sector, expects Nomura

Growing household incomes, low penetration across several categories and expanding distribution network combine to make consumer one of the most attractive growth sectors in the medium term, says Nomura Equity Research in its research note

It is expected that margins will improve marginally year-on-year across the HPC (home and personal care) sub-sector of the consumer sector. For the sector, operating margins are likely to improve by 50 basis points, according to a research note from Nomura Financial Advisory and Securities (India) Private Limited.  However, going into H2FY14F, it expects margins to come under pressure as rupee depreciation starts to hit companies with some lag. Overall, it expects some toning down of consensus margin expectations across the sector for FY14F.

 

Nomura expects price hikes will be likely to start to reflect in revenue growth, which should provide some comfort, particularly given recent rupee depreciation.

 

Growing household incomes, low penetration across several categories and expanding distribution network combine to make consumer one of the most attractive growth sectors in the medium term, says Nomura in its advice to investors in the consumer sector.

 

The comparative valuation for key players in the consumer sector is given in the table below:

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Flat Buyer Cannot Be Charged Extra for Car Parking

The Central Mumbai District Consumer Disputes Redressal Forum has directed Tata Housing Development Company to refund Rs50,000 to Ghatkopar-based Suresh Mehta and pay him compensation of around Rs20,000. The Forum emphasised that a flat buyer cannot be charged extra for car parking space, calling it an ‘unfair trade practice’.

“Car parking area is the common area of the society. Therefore, the opponent (the developer) had no right to charge any amount for the sale of the parking space,” observed the Forum. It followed the Supreme Court judgement which held that a developer can only sell a flat and has no right to sell a parking space.
 

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BMC Revokes Nod to DB Realty Project Next to Jail

DB Realty had launched two luxury 72-storey residential towers, Orchid Heights, near the high-security jail on Arthur Road in central Mumbai. Several clients had paid a few crores each to book apartments in the towers. The building would have come up barely 18 metres from the jail’s compound walls. In July 2013, municipal commissioner SJ Kunte decided to terminate the project’s commencement certificate after the special inspector general of police (jail), southern region, opposed the permission for the building. DB Realty claims to have invested Rs70 crore in the project and built the foundation and plinth of the rehab buildings after obtaining the mandatory clearances in 2010. The Maharashtra Jails Act, 1979, bans construction within 183 metres from the compound wall. Model Jail Regulation, 2003, reduced the distance to 150 metres from the main fortification wall.

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