«Within consumption, people have slowed down on the staples kind of consumption, but they have still, at least in the last quarter, continued to do discretionary consumption,» says Rohit Agarwal, Kotak Mahindra.
And today we will be talking about the consumption space because given the fact that you are seeing a slowdown in urban consumption, once upon a time you had talks about rural consumption being under pressure but now that weakness has actually creeped into the urban consumption as well and how should one actually look at the space?
Rohit Agarwal: Well, as you very rightly said that maybe for the last seven to eight quarters we were talking about weakness in rural consumption, but in the last two to three quarters we have heard or seen a decisive slowdown in urban consumption.
Well, we have to first understand why urban consumption has slowed down. If you look at the companies that have reported numbers and what they are saying, they are saying that there is less earnings for non-salaried urban versus the inflation, which essentially means that the earnings growth or the income growth for urban non-salaried is lesser than inflation, that has meant that there is slowdown in consumption. Within consumption itself, if we look, there is a very-very broad or very-very different approaches to consumption that people have taken.
Within consumption, people have slowed down on the staples kind of consumption, but they have still, at least in the last quarter, continued to do discretionary consumption. As late as