RURAL DEMAND
Government focus on agriculture, rural income to sustain tractor demand: Swaraj Engines
The government's agricultural focus in India, along with initiatives to boost rural incomes, is expected to sustain tractor demand despite a 7 per cent industry sales decline reported by Swaraj Engines Ltd. The company's annual report highlights opportunities in the horticultural segment and factors like increased affordability, demand for farm mechanisation, and government efforts to improve agriculture. Swaraj Engines foresees its engine business aligning with the industry's growth trajectory.
FMCG spends up 18% in two years due to inflation- Kantar
Consumers have increased their spending on daily essentials, groceries, and household products by 18% in the first quarter of 2024 compared to two years ago, according to a recent Kantar report. Despite a recent softening in commodity prices, the prices for these goods remain nearly a fifth higher.
What to expect from the Budget going forward? Sanjiv Puri answers
So, we are on a solid foundation because of certain initiatives that have taken place. It is not that it just happened like that. So, there is a reason for which and it sets the economy on a solid foundation.
Green shoots seen in rural demand: Wipro Consumer CEO
Vineet Agrawal, CEO of Wipro Consumer Care and Lighting, noted positive signs of growth in rural demand and anticipates a recovery in the hinterland by September, supported by favorable monsoon conditions and a successful harvest. Furthermore, he suggests that stable government policies could potentially boost sales of discretionary products through continuity and consistency.
Loan demand for rural homes, tractors may rise on govt push
"We believe a likely surge in rural credit demand, higher affordability and government push toward financial inclusion with ease of regulations in the microfinance sector. A likely credit-linked subsidy scheme (CLSS) in the Pradhan Mantri Awas Yojana would drive credit growth going forward," ICICI Securities said in a report.
PM Modi shows rural bent, OKs ₹20kcr for PM Kisan Nidhi Scheme
The Prime Minister approved the 17th instalment of the PM Kisan Nidhi Scheme, benefiting 93 million farmers with around ₹20,000 crore. This move is seen as a boost to rural demand and consumer stocks. The new coalition government is expected to focus more on rural welfare, signaling a shift towards consumption-focused policies. Rural markets have shown growth, outpacing urban markets for the first time in five quarters, indicating a positive trend for the FMCG sector. The PM emphasized the government's commitment to farmer welfare and agriculture.
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Modi 3.0: FMCG companies can cheer the new coalition government
In a symbolic move, Prime Minister Narendra Modi's first action after being sworn in for a third term was releasing the 17th PM-KISAN installment, providing financial relief to 9.3 crore farmers. With a weaker mandate, the government is expected to focus on rural welfare, potentially boosting FMCG sector growth and consumption.
Nifty 50 could scale new peak this week, believes Rajesh Palviya
There was uncertainty when the counting was happening. So, most of the bags moved to the defensive sector and in the defensive sector FMCG, pharma, these two pockets were majorly focused by the market participants.
Demand under rural jobs scheme eases again in May
Demand for work under India's rural job guarantee scheme, MGNREGS, dropped for a seventh consecutive month in May, signaling improved economic conditions at the start of the fiscal year. About 37.46 million individuals sought work, down 12.1% from the previous year, with 27.18 million households seeking work, a 14.3% drop. The trend is attributed to better-paying job opportunities and the impact of heat waves across the country, although the data is subject to revision.
Rural demand as healthy as urban demand for SUVs: Tarun Garg, Hyundai Motor India
I have been in the industry for 30 years and we had always imagined that the rural customers would prefer smaller cars but there also aspirations are taking over. And also the second thing is that because the infrastructure has really improved and also the dissemination of information has really improved, the aspirations of the rural customers are also shifting them towards SUVs.
Rural demand theme blooms
Investor money is shifting to defensive shares like FMCG, healthcare, and information technology following the lower-than-anticipated seats for the BJP in recent elections. Marico, Godrej Consumer, Nestle India, ITC, Britannia, HUL, and Dabur saw significant gains. The Nifty and NSE FMCG Index also rose.
In Focus: Scrips that like a cloud on the horizon
Companies such as Hindustan Unilever (HUL), Britannia, Dabur, Hero Motocorp, Westlife Foodworld, Shoppers Stop and others have already indicated in their commentary a gradual demand recovery if the monsoon forecast turns out to be accurate.
Growth momentum likely to stay in Q1FY25: FinMin
The finance ministry's April report predicts strong economic activity in FY25, with rising industrial activity and fixed investments. Positive macro-economic indicators include a bright manufacturing outlook and improved services sector, supported by increased capacity utilization and EPFO data.
SUVs roar on country roads as sales from rural India sees a spike
Hyundai Motor's top three cars sold in rural India during January-April 2024 were all SUVs, nudging out the small car Grand i10 from the podium for the first time. SUVs such as Exter, Venue, and Creta accounted for two-thirds (67%) of Hyundai's rural sales in the first four months of the calendar year.
Consumption demand remained subdued in Q4, rural India recovered after several quarters: ITC
FMCG major ITC notes subdued Q4 consumption but rural demand recovery. Q4 profit below estimates at Rs 5,190 crore; revenue up 2% to Rs 19,446.5 crore. Cigarette revenue rises 7.7%, FMCG (excluding cigarettes) up 7.2%, impacted by low priced Chinese supplies and trade restrictions on agri commodities affecting agri business segment.
Uneven rainfall affected rural demand, says HUL chairman Nitin Paranjpe
Hindustan Unilever (HUL) reported a strong performance in the last fiscal year despite challenges in the macroeconomic environment, including erratic rainfall affecting agricultural output and rural demand. Chairman Nitin Paranjpe noted a gradual deflation in commodity prices but highlighted sustained high inflation. HUL's managing director Rohit Jawa's remuneration increased by 4% to Rs 22.39 crore, with his salary being 153 times higher than the average employee's remuneration. HUL's permanent employee count increased to 7215 from 6697 the previous year, with a 7.38% rise in median employee remuneration.
Growth to come from MSME, affordable housing: Rajesh Sharma, Capri Global
Even the current risk rate have been increased, cost of fund is going up. The NBFC is only one option to pass on that cost to the customer
FMCG demand most in five southern states: Discretionary or essential, sales go north in south
South India leads post-Covid demand recovery with increased FMCG sales, higher consumer spending, and more shopping trips in 2023, a Kantar report shows. Retail sales growth in the peninsula region outperforms the rest of India. The region's rapid recovery is fueled by a young workforce, new-age sectors, and robust manufacturing investment.
A heavy monsoon season is great news for these Indian stocks
Stocks of Indian firms reliant on rural demand are rising with optimistic monsoon forecasts. Motorcycle, farm-equipment, and FMCG companies are seeing improved sales in rural areas. Nifty FMCG Index is up, Hindustan Unilever and Dabur India expect demand growth.
Roosevelt Dsouza of Nielssen on whether the trend of rural India catching up in FMCG demand is durable
Roosevelt Dsouza of NielsenIQ discusses FMCG trends, emphasizing rural-urban gap. Growth driven by small pack preferences and personal care in rural areas. CEOs review Nielsen report. India awaits rural recovery. Consumer behavior shifts to volume growth. Categories perform differently. Dsouza says there are certain categories where one can see K-shaped growth with some categories moving up and some going down.
Sweltering heat pushes up demand for temporary workers in rural markets
There is a 20% year-on-year increase in rural job vacancies, according to executives at recruitment services and consumer companies. They estimate 20,000-50,000 new temporary jobs are being created this year thanks to robust summer season demand in rural and semi-urban areas while companies with a large focus on rural businesses are looking to bolster sales and distribution presence in the hinterlands.
FMCG companies to see muted demand in June quarter, recovery likely in H2
Overall volumes, which indicate the number of products consumers bought, expanded 5.2% in the March quarter, unchanged from the three months to December. Sales volumes in rural markets climbed 5.8%, and in cities by 4.7%, from a year earlier, data from Kantar showed. Kantar monitors branded and unorganised products, including unpackaged voluminous commodities. Nielsen, on the other hand, tracks primarily branded retail sales.
FMCG, auto companies break the jinx as rural growth rises above urban
Rural FMCG demand outpaced urban markets in Jan-Mar 2024. Car companies reported higher rural sales. NielsenIQ noted 7.6% rural growth. Factors include robust rabi crop and government measures. Maruti Suzuki saw record rural sales.
India will remain a rewarding market on a bottom-up basis: Ashwini Agarwal
I think there was a lot of disruption in the rural disposable income on account of the disruption in jobs in the urban area on a post COVID basis. But I think with manufacturing picking up several of those jobs are coming back and those transfers from urban to rural India might be getting back.
Rural FMCG sales outgrew urban for the first time in 5 quarters in Q1: NielsenIQ
In the January-March ’24 quarter, rural markets surpassed urban consumption for packaged consumer goods for the first time in five quarters, with rural growth at 7.6% while urban demand declined by 5.7%. Overall FMCG sector value grew by 6.6% driven by consumption, with flat price growth at 0.1%. NielsenIQ highlighted the growth in the FMCG industry being driven by consumption trends, with rural areas leading the growth. By volume, the sector grew by 6.5% nationally, with non-food sector sales growing at 11% compared to 4.8% for food. Home and personal care categories outperformed food categories, with larger pack sizes driving growth.
Dabur explains why rural demand for its brands is growing at a faster clip than urban
FMCG giant Dabur has increased its rural footprint, driving demand for its brands by nearly 400 bps compared to urban areas. The company has increased investments in consumer activation in rural areas and launched newer affordable and rural-specific packs to cater to these markets. CEO Mohit Malhotra noted that Dabur's rural distribution is the highest in the industry, giving it a distinct advantage in driving rural growth.
HUL, Tata Consumer and Nestle India's margins gain on premiumisation, cost cuts
While volume growth was tepid to modest for the three companies, gross margins have expanded. Margin expansion has been achieved through better operational efficiency or productivity gains. Taking price rises, lowering ad spends and rationalising costs are the various levers used.
HUL expects improvement in FMCG demand with no price hike in short term
"We expect FMCG demand to continue improving gradually. Forecast of above-normal monsoons and improving macroeconomic indicators augur well. We expect price growth to be a low single-digit decline in the first half of FY24," said Tiwari during earning call.
Demand trends remained sluggish in March quarter, rural growth picked up: Dabur
Dabur expects consumption to rise with positive rural growth trends, aided by price rollbacks in staple food. The company anticipates revenue growth, market share gains, and increased branding investments, driven by strong performance across segments and international expansion.
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