Consumer Sector – Rural To Drive Growth For Staples But Sluggishness In Discretionary Continues: Systematix

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. .Systematix Research Report.The overall demand environment for staples continued to show signs of recovery (helped by a favorable base in home and personal care categories), while discretionary demand trends remained sluggish, with the exception of paints. Recoveries in categories where price cuts were implemented, present a positive volume growth outlook, albeit climate vagaries (El Nino concerns and its possible impact on food inflation) and intensifying unorganised competition remain key near-term risks. Continued softening in commodity prices from recent highs is a key positive driving volume aiding measures like price cuts, promotions, marketing and new low unit packs launches. We believe value and volume growth rates in most categories are converging, considering the absence of price hikes and mix improvement. On the discretionary front, growth remains sluggish, especially in apparel and quick service restaurant, prolonging the deceleration that started post festive season. This could be a temporary slowdown, but if it continues for few more months, it could impede the footprint expansion plans of most industry players. Margins could pose a concern, as the recovery is being driven by promotions, discounts and higher sales of entry-level products. While the medium-term narrative on discretionary remains strong, we foresee more earnings cuts in FY24, especially on the margin front, which could drive some more de-rating in the space and amplify the recent underperformance. While we expect near term sluggish growth in QSR and apparel, paints, jewelry and luggage may fare relatively better..Click on the attachment to read the full report:.Dairy Sector Check - Early Signs Of Emerging Stability In Milk Prices: ICICI Securities.DISCLAIMERThis report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Consumer Sector – Rural To Drive Growth For Staples But Sluggishness In Discretionary Continues: Systematix

While we expect near term sluggish growth in QSR and apparel, paints, jewelry and luggage may fare relatively better.

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