In QSRs, Devyani International, Restaurant Brands should see a good recovery from Q3: Kaustubh Pawaskar

Pick-up in demand in rural markets, which contribute close to half of annual sales of most packaged goods companies, is crucial for overall recovery of the sector.

Indian Consumers: While the affluent segment gravitated toward luxury apartments, high-end cars, and premium consumer goods, lower-income brackets grappled with inflation and rural hardships. Sales surged for luxury items, bustling malls and restaurants, alongside a spike in hotel room rates due to heightened demand. Conversely, FMCG companies faced stagnation in selling everyday items like biscuits, soaps, shampoos, and perfumes, yearning for increased consumption rates.

Consumer goods companies and automakers are optimistic that the upcoming elections in India will boost rural demand. Elections often lead to increased government initiatives, which in turn, stimulate rural incomes and liquidity. Companies like Marico, Dabur, and Godrej Consumer Products have noted that elevated food prices and below-average monsoons have delayed the recovery of the rural economy. During elections, political parties offer incentives in rural areas to gain support, such as subsidies, cash transfers, and policy moves that increase disposable incomes.

New Delhi [India], November 14 (ANI): The rural demand and government spending will be key drivers of India’s economic growth in the second half of the current financial year (October-March FY25), according to a report by ICICI Bank. The report anticipated that the rural economy gains momentum, with the government’s continued emphasis on infrastructure and […]

A Bloomberg earnings upgrade or downgrade is the consensus estimate by equity analysts tracking the stock, indicating expectations of higher or lower profits, respectively.

Packaged consumer goods in rural India saw tepid demand in Q3FY24, raising concerns over FMCG sales volumes. Volume growth in rural markets is expected to be flat or slightly lower compared to urban markets.

The preference for premium products continued, with more demand for, say, double-door refrigerators than single-door ones. Washing machines, TVs and fans also saw higher demand at the top end.

The midcap universe is generating excitement due to the neglected space of the past and the potential for growth in areas such as rail-related stocks, Indian domestic pharma, defence names, and auto ancillaries. However, Bata footwear is worth investment for a long-term investor, not to mention heavy bets on Hindustan Unilever and Dabur, as they show significant rural consumption.

Since a year, there has been a noticeable drop in rural volume due to inflation and erratic monsoons. While the demand in cities is leading the overall growth with urban incomes more resilient, companies expect rural volume to recover on the back on a decent monsoon, which generally translates into higher sales after a quarter lag.

“It is very difficult to say that whether it is a midcap or sentimentally by numbers it might look like a largecap but within the domestic consumption space, organised retail is a very good space where we have a decent allocation and organised retail shows no impact of what is happening outside India.”