Consumer cos expected to reach pre-Covid sales levels in Q4FY21
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Consumer companies are expected to either return to and in some cases exceed pre-Covid sales levels in Q4FY21, Motilal Oswal Financial Services said in a report.
Accordingly, it cited lower base in the previous year, increased mobility on the back of lesser Covid cases, strong rural demand, record high Rabi sowing, recovery in celebratory occasions, and improved consumer sentiment as factors behind the expected trend.
"Rural markets will lead growth on account of a good harvest, higher government spends, lower Covid impact, and a better agri outlook, with normal monsoons expected," the report said.
"Recovery in urban markets continues to be strong as life in the metros and larger cities moves back to normal with increased mobility."
Besides, it pointed out that e-commerce showed its prominence over last year and general trade has returned to pre-Covid levels.
Modern trade, it said is normalising now after facing headwinds caused by the pandemic in the past few quarters.
"Price hikes taken by most companies earlier in the year as well as during the quarter, combined with continued stringent cost-control measures, should offer some relief from the sequential inflationary trends seen in most commodities."
"Most companies in the sector have resumed ad spends and brand investments, but are expected to continue curtailing discretionary spends as part of their efforts on cost savings."
