Consumer Sector Q2 Results Preview - Consumption Trends Sustain; Jewelry To Outperform: Motilal Oswal

Motilal Oswal Report

In our consumer coverage universe, we expect fmcg/jewelry verticals to sustain/outperform their growth trajectory in Q2 FY25, whereas QSR, paint and liquor verticals are expected to see weakness in growth and profitability.

For staples companies, demand trends remained stable QoQ in Q2 FY25, with rural markets outperforming urban areas for the third consecutive quarter. However, heavy rains and floods in certain regions have disrupted the supply chain. They also affected out-of-home consumption and consumer offtake, particularly for the beverages category. Food and beverage companies are likely to implement price hikes in response to rising costs of agricultural commodities. Gross margin expansion is expected to stabilize in Q2 after seeing significant improvements over the past four-five quarters.

However, marketing and distribution expenses would remain elevated, leading to flat or marginal decrease in Ebitda margins for most companies. Looking ahead, H2 FY25 is expected to see better performances, bolstered by the festive season, rising incomes, government initiatives, and an above-average monsoon, all of which are likely to boost consumer demand across key categories.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.