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Systematix Research Report
Q3 FY23 is expected to be a soft quarter for both consumer staples and discretionary, as consumer sentiment, especially in rural India remains weak; while urban saw some pressure during Nov/Dec, discretionary categories decelerated slightly after having outperformed for a long period.
Volumes could remain soft for staples companies, as rural demand still reels from the effects of inflation and urban sees bouts of weakness. However, some green shoots are visible, especially on the rural side.
While volume growth in food categories could slow from a high base, that in home and personal care categories could speed up from a low base, albeit with the delayed winter likely impacting demand for winter products.
Revenue growth, however, will still likely be in double-digits overall, mainly led by price hikes taken in the past few quarters. While gross margins should improve sequentially across the board, we do not expect significant improvement in Ebitda margin on expected higher marketing spends.
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