Consumer Sector Q3 Results Preview - Demand Tepid, Margins Improve Sequentially: Prabhudas Lilladher
Consumer demand and sentiments remained tepid during Q3 FY23.
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Prabhudas Lilladher Report
We estimate our coverage universe to report sales, Ebitda and profit after tax growth of 15.6%/12.4%/12.4% YoY. We expect sequential gross margin expansion in Q3 and Q4 due to lower priced inventory coming into usage, stable prices and full benefit of price hikes undertaken in past couple of quarters.
Consumer demand and sentiments remained tepid during Q3 FY23. Staples demand in rural remained weak and failed to show any recovery; urban pockets also witnessed demand pressures intermittently in Nov/Dec 2022.
Demand across discretionary categories like quick service restaurant, apparel, footwear and retail appear to have taken a pause post multiple quarters of strong growth.
We expect divergent trend in volume growth across segments like home and personal care, food, QSR, jewelry, apparel, footwear and paints etc.
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