In QSRs, Devyani International, Restaurant Brands should see a good recovery from Q3: Kaustubh Pawaskar
Kaustubh Pawaskar, DVP, Fundamental Research, BNP Paribas, says “prior to election years, we see the government increasing spending in the rural markets or agri economy and that should augur well for rural demand and to see a good bit of recovery in the quarters ahead. Urban consumption demand is quite stable over there. Once rural is back on track, we should see volume growth gradually recovering and that is expected from Q2 with a bit of help from the festive demand which is going to be there in October and November.”
In the FMCG pack, Marico consolidated revenue is marginally lower on a year-on-year basis. GCPL is also a bit weak-ish in terms of volumes. What is your view on the FMCG pack as a whole for Q2?
Q2 is going to be a weak quarter for the consumer good companies.
So, there is not much improvement in demand as such for the consumer good companies. Rural demand is yet to see fundamental recovery. Whatever growth we have seen in Q1, was on a low base.
But from the consumption point of view as such, there is not much improvement in rural India. Also, food inflation was high, August monsoon was below par and the recovery which was supposed to happen in Q2 was not there. As a result, we have seen lower growth for consumer goods companies in the domestic market and that led to volume growth in the range of low-single digit to mid-single digit for the companies which have come out with an update.
I believe that is going to be the flavour for Q2 for most of the consumer good companies.
