How industries fared in April 2013: CARE Research
CARE Research has come out with its report on industry updates, April 2013. According to the research firm, domestic coffee consumption is expected to increase in India which can be attributed to the shift in perception of coffee from a traditional beverage that is consumed mainly in South India.
CARE Research's industry updates: April 2013
Agri. Products - Sugar - Sugar output continued to increase on a m-o-m basis in January 2013Production of sugar during the current season (2012-13) is expected to witness a decline over the previous year due the deficiency in rainfall, lower sugarcane acreage, drop in yield and recovery rate in the key sugar-producing states like Maharashtra and Karnataka. Although, other major sugar-producing states like Uttar Pradesh and Tamil Nadu are likely to witness higher sugarcane acreage and sugar production in sugar season of 2012-13, output from these states will not be sufficient to offset the likely shortfall in sugar production in Maharashtra and Karnataka. During the current sugar season, government has released higher quantity of non-levy sugar in the market without any inter-month restriction which led to drop in prices in the first few months of SS 2012-13. However, with steady demand for sugar in the country by households and manufacturers of confectionaries, biscuits, chocolates etc., sugar prices in the current sugar season are expected to remain elevated compared to last year.Agri. Products - Tea and Coffee - Domestic coffee prices declined for the third consecutive month in February 2013Erratic weather conditions in the key tea growing areas of India led to fall in production of tea in CY12 compared to CY11. Even on the global front, tea output was severely affected due to vagaries in climatic condition. The reduction in output resulted in higher domestic and international tea prices in CY12. In the current coffee season 2012-13, coffee production in India witnessed a growth during the period October 2012 –January 2013 on a Y-o-Y basis. Domestic coffee consumption is expected to increase in India which can be attributed to the shift in perception of coffee from a traditional beverage that is consumed mainly in South India, to a youthful and trendy beverage consumed throughout the nation, in several forms and retail formats.Auto - Commercial Vehicles - LCV GC remained the lone performer, while MHCV sales continued to declineThe CV industry observed a decline of of 1.5 percent YTD FY13 (Apr - Feb). The drop was primarily due to substantial decline of 25 per cent observed in M&HCV GC segment during the said period. LCV goods carrier (GC) segment posted an impressive rise of 16.3 per cent during the same period on the back of healthy redistribution demand arising out of non-discretionary consumer spending on FMCG and consumer durables, expanding urbanisation, etc. Flurry of new launches recently has also pushed the demand for this segment Muted industrial output, capital goods and agriculture produce continued to keep the growth levels in primary freight movement under constraint, consequently affecting the demand of M&HCV GC segment. The slowdown in M&HCV GC sub-segment is likely to continue for near term period which will significantly restrict the growth levels of the CV industry. The passenger carrier (PC) market would likely benefit due to increased allocation under JNNURM scheme in the Union Budget 2013-14.Auto - Passenger Vehicles - Rough patch continues for passenger vehicle industryPassenger Vehicle (PV) industry sales registered a rise of 4 per cent in FY13 (Apr-Feb). While the voluminous passenger cars (PC) segment sales plunged by 5 per cent in FY13 (Apr-Feb) irrespective of heavy discounts offered by major OEMs, UV registered a stupendous rise of 54 per cent during the same period on account of shifting consumer preference towards UV segment. PV industry growth has moderated since FY12 due to demand pressure owing to high interest rates coupled with spiralling fuel cost. Although growth will remain muted in near term due to the economic uncertainties, CARE Research expects these concerns would fade away in medium term as delayed purchases and revival in economic conditions will boost the industry demand in medium term.Auto - Two Wheelers - Scooter observed a downfall for the first time in last four yearsThe demand environment for the two wheeler industry continues to remain challenging in the current fiscal. The two wheeler industry has witnessed a growth of 4 percent YTD (Apr - Feb) in FY13. The growth has been primarily led by scooter segment. The industry growth is likely to observe moderate growth in near term on account of uncertain economic situations, coupled with high inflation, firm interest rates and high fuel prices which will dent the demand for the two wheelers. In near term scooter segment primarily the gearless scooter is likely to act as saviour for the two wheeler industry on account of rising demand from female buyers combined with its growing preference among the urban male buyers owing to greater riding comfort and improved styling.Auto - Tyre - Replacement market helps to negate slowdown in tyre demandThe tyre demand has always been significantly influenced by the automobile demand, as it is the primary user industry. With the continuing pressure on automobile demand owing to challenging economic environment, the OEM demand for tyres have been considerably affected during FY13. However, the moderate rise in replacement demand helped to keep tyre demand afloat. CARE Research foresees, OEM demand would observe a drop of during FY13. OEM demand of almost all the segments will be affected by the slowdown observed in automobile demand. However, CARE Research foresees, improvement in the economic scenario post first half of FY14, would provide much needed fillip to the automobile demand and consequently pushing the tyre OEM demand. The replacement demand that has been saviour for the industry growth in the first nine months of FY13 would continue to drive industry growth for FY13. CARE Research foresees replacement demand would remain healthy in FY14 as well.Disclaimer: This report is prepared by CARE Research, a division of Credit Analysis & REsearch Limited [CARE]. CARE Research has taken utmost care to ensure accuracy and objectivity while developing this report based on information available in public domain. However, neither the accuracy nor completeness of information contained in this report is guaranteed. CARE Research operates independently of ratings division and this report does not contain any confidential information obtained by ratings division, which they may have obtained in the regular course of operations. The opinion expressed in this report cannot be compared to the rating assigned to the company within this industry by the ratings division. The opinion expressed is also not a recommendation to buy, sell or hold an instrument.CARE Research is not responsible for any errors or omissions in analysis/inferences/views or for results obtained from the use of information contained in this report and especially states that CARE (including all divisions) has no financial liability whatsoever to the user of this report. This report is for the information of the intended recipients only and no part of this report may be published or reproduced in any form without prior written permission of CARE Research. 
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