Series 120 – India’s Consumption Trends – A Complex Dynamic

Corporate commentary from the latest quarter suggests a split in the consumption story. Rural and smaller-town demand is gaining pace, while metro markets show mixed trends.

Staples companies reported rural volume growth outstripping cities, aided by a good monsoon. Tractor makers, agri-input firms, and lenders also saw stronger traction outside urban centres. Tier-3 and Tier-4 towns are emerging as growth hubs, supported by housing completions and state-led capex, driving demand in durables and mid-segment housing.

In contrast, urban-facing businesses spoke of value-conscious behaviour. Yet premium pockets such as jewellery and luxury housing continue to hold up, underscoring a divided consumption pattern.

Hence, generalising any parameter in India by looking at the ‘average’ would be misleading, as a granular, segmented deep-dive provides a more accurate picture.

Itus’ portfolio is constructed with such names in the consumption space where the growth levers are well positioned.

Source: Nitin Chanduka, Emerging Markets Equity Analyst, Bloomberg LP

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