Consumer Staples Q2 Preview- Volumes Expected To Inch Up Starting Q3, But Inflation Rising Too: Yes Securities

Yes Securities Report

Between staples and discretionary, staples is likely to outperform in Q2 FY25 even with stable demand trends compared to Q1. Starting Q3 FY25, we maintain our optimism of improved volume trajectory on compound annual growth rate basis (YoY growth will optically look better on low base).

On raw material front, crude and its derivatives, which offset Agri/Food inflation in Q2, is now seeing inflation in recent days.

Even after the recent correction, majority of our fast moving consumer goods coverage is trading higher or close to their three-year/five-year average multiples with only Dabur India, Hindustan Unilever and Tata Consumer Products at discount to their FY26E PE multiple.

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