Consumption recovery theme should do well for next 3-6 months: Sunil Koul, Goldman Sachs

economictimes.indiatimes.com:

Sunil Koul, Executive Director (Asia Pacific Portfolio Strategy, Global Macro Research), Goldman Sachs, says while high-end consumption has been holding up pretty well, there’s some some weakness in mass market consumption. We are hearing from the companies that things are bottoming out and not worsening. So, consumption and at least the volume growth for the staple companies will improve in coming quarters.”

A lot of the corporates that we have been speaking with are alluding to the fact that even despite the festive season, etc, there has not really been any incremental pick up in consumption patterns all around. Rural is lagging a little bit, maybe the premiumisation trend is playing out. What is making you optimistic on consumption as a long-term story?
There are a couple of things on the consumption side. I think the high-end consumption has been holding up pretty well there. If you look at the mass market consumption and the lower consumption as you mentioned, obviously there has been some weakness in there, part of that is because of the higher inflation starting to impact consumer wallets, part of it is obviously the monsoons which were subpar.

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But what we are hearing at least from the companies is that things are bottoming out. So, things are not worsening and we do think consumption and at least the volume growth for example for the staple companies will improve in coming quarters. At the same time, we also think that the government will continue to spend on income