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Last Updated : Jun 13, 2019 10:08 AM IST | Source: Moneycontrol.com

Budget Snapshots | Policy measures to boost rural consumption will benefit select FMCG companies

In the upcoming Budget, there are expectations for policy measures that can put more money in the hands of rural consumers.

Anubhav Sahu @anubhavsays
 
 
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Rural distress is hitting some FMCG companies hard, a fact evident from the Q4FY19 numbers and management commentary, pointing to a demand slowdown. Rural demand which was about 1.3 times urban demand has come down to 1.1 times in Q4 for prominent companies such as Hindustan Unilever and Dabur.

In the upcoming Budget, there are expectations for policy measures that can put more money in the hands of rural consumers. Policy measures designed to improve farm income, create avenues in agriculture allied services, using direct benefit transfers (subsidy), revamp of rural employment schemes, and income support schemes can all help improve rural consumption demand.

This would help companies having higher sales exposure and distribution reach to rural areas. In our view, companies such as HUL, Dabur, Emami, Colgate tend to benefit disproportionately from such measures.

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First Published on Jun 13, 2019 10:08 am
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