FMCG And Retail Q4 FY24 Result Preview - Subdued Demand Environment Persists: Axis Securities

Axis Securities Reports

FMCG

FMCG companies under our coverage are expected to experience subdued performance as the demand environment continues to remain muted. Revenue growth will primarily be driven by volume growth in the low to mid-single digits, mainly propelled by price cuts and increases in grammage, with raw material inflation easing off.

Easing inflation, a strong festive season, higher government spending ahead of the general election, and increased urban remittances will define future growth momentum in rural areas.

Retail

The overall revenue growth trend for the Retail sector is expected to vary, reflecting a mixed bag as discretionary spending continues to remain subdued. Premium retailers such as Trent and Ethos are anticipated to perform better than value retailers.

Regarding margins, we foresee a mixed performance, with value retailers, footwear, and quick-service restaurant players likely to experience more margin pressure due to subdued same-store sales growth performance and increased upfront costs associated with store openings.

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