What will be the impact of import duty rejig in edible oil on 3 FMCG categories? Abneesh Roy explains
Abneesh Roy, Executive Director, Nuvama Institutional, says the food space is quite attractive and there we will prefer Bikaji because it is a pure-play foods company. Among larger companies, he also likes HUL and ITC. Food is an attractive category, but there are very diversified companies. A double-digit volume growth for Bikaji is seen in last many quarters and that is expected to continue. After the edible oil duty hike, in H2, most of the food companies are expected to take price hikes. That should help overall pricing growth also.
While the first quarter was subdued, we did see some positive outlooks from a few QSR companies. What is happening in terms of a meaningful recovery, on ground zero?
Abneesh Roy: Gradual recovery will happen. That space has seen slowdown now almost for six quarters. The base has become favourable, but there is a lot of competition between the players and delivery seems to be doing better. So, delivery-focused players should do better. But urban consumption is still a challenge. We have seen the impact of higher interest rates. We have also seen the impact of job losses and the salary cuts in the D2C startups.
Even in the software industry, job addition has been slow. So, urban consumption is more challenging than rural. In FMCG, for example, we expect rural to grow faster than urban even in this quarter. That is why I would say within QSR, the demand trends are muted currently and it will be a gradual recovery and delivery-focused players will see a higher recovery. We are more
