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Festive checks – Robust demand for jewelry; FMCG and paints see mixed trends

* In jewelry, festive season demand remained strong despite high gold prices. Demand traction picked up well at the end of Sep and has remained intact in Oct. Leading retailers such as Tanishq, Kalyan Jewellers, and P. N. Gadgil saw robust exchange-led purchases, aided by promotional offers and weddingrelated buying. While footfalls were impacted by high gold prices in Aug and mid-Sep, demand recovery was quite swift thereafter, as consumers adapted to high rates. Notably, gold coin sales in small denominations (2g-5g) surged, reflecting value-conscious consumer preferences.

* In paints, demand trends remained muted through Jul-Oct, impacted by extended monsoons and an early Diwali. West and South markets witnessed the sharpest slowdown, while North and East performed relatively better. Competitive intensity remained elevated, though pricing aggression from Birla Opus has moderated vs. last year. Asian Paints maintains price leadership (2-5% premium) with strong dealer retention, while Dulux is performing well in the interior category, albeit on a smaller base. Distributors expect demand to remain subdued, with a flat industry growth outlook for FY26 (with marginal pickup in 2HFY26).

* In FMCG, general trade (GT) feedback suggests that companies have largely passed on the GST 2.0 benefits to end consumers. MRP revisions have been implemented in large packs, while select low-unit packs (LUPs) saw price adjustments instead of grammage increases. The transition led to temporary supply disruptions over the past few weeks as companies worked on pack size and price revisions; however, supply has largely normalized since mid-Oct. Distributors highlighted that non-compliance with revised pricing norms could attract penalties of up to INR500k per SKU. Demand has not seen much improvement in Oct either, with limited traction in festive-driven products. Since the alternate channel (MT + Ecommerce) has a significant share in FMCG, our checks were limited to GT. Any meaningful growth in alternate channels can create growth divergence for FMCG companies.

Jewelry: Healthy festive season demand despite high gold prices

Channel checks across major jewelers indicate that festive season demand for jewelry remained healthy despite record-high gold prices. Retailers such as Tanishq, Kalyan Jewellers, and P N Gadgil reported strong traction during the Dhanteras and Diwali period, supported by exchange-led purchases, promotional offers, and wedding-related buying. While high gold prices initially dampened footfalls, demand recovered meaningfully closer to the festivals, as consumers adapted to elevated rates. Gold exchange programs, such as Tanishq’s zero price-deduction offer and discounts on making charges by Kalyan helped to keep the momentum intact. Gold coin sales surged, particularly in smaller denominations (2g-5g), reflecting valueconscious consumer behavior. Sales remained concentrated in 22- and 18-carat jewelry, while low-carat and lab-grown diamond (LGD) segments saw limited traction. Overall, the season’s performance was driven more by value than volume, with festive sentiment and weddings underpinning resilient consumer demand across regions.

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