Moneycontrol Pro Panorama | Will consumer sentiments sustain beyond festive season?

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Despite rising inflation, consumer sentiment is rising and the festive season has brought cheer to industry. Both rural and urban consumer sentiments have perked up, despite a rise in unemployment, shows the latest edition of our economic recovery tracker.

The cheering up of consumer sentiments can be seen from reports of robust sales growth being reported. Sample these:

Auto sales rose strongly during the Navaratri period. According to Jefferies, car sales rose 59 percent compared to the same period in 2019 (pre-COVID) and 70 percent over 2021. For two-wheelers, the growth rates were 4 percent and 52 percent, respectively.

The brokerage says real estate registrations in Delhi have risen 25 percent over a year ago and 70 percent over 2019. The numbers are quite similar in other top cities too, said a report from JLL. (Read our report on what’s driving real estate growth in India here).

Jefferies says credit card spends from the start of the festive season till 17 October was up 47 percent from a year ago.

An HDFC Securities dipstick poll of dealers showed that consumer packaged goods sales started seeing some revival from the end of the second quarter. It also pointed out that rural demand was increasing sequentially and that FMCG brands had a slew of launches after a two-year lull.

Similarly, jewellery demand remains strong and the first 10 festive season days saw volume growth of 20 percent, according to HDFC Securities.

These numbers add credibility to industry estimates (as per Reuters) that festive season sales — starting the last week of September and going on till early November — will cross $27 billion, double the levels of 2019.

It also tied in with RBI economists’ optimistic assessment of the economy, which we wrote about yesterday.

The question is whether demand will sustain beyond the festive season. Uneven rainfall distribution, persistent inflation and a global recession could still play spoilsport. A fresh spike in COVID cases as reported by states such as Maharashtra, Karnataka and Kerala is another danger.

Investing insights from our research team

LTTS: Good quarterly performance, but valuation tempers excitement

Thangamayil Jewellery: Weak results but strong long-term growth prospects

Heidelberg Cement India: Yet another poor quarter

What else are we reading?

Fund manager survey ‘screams macro capitulation, investor capitulation, start of policy capitulation’

India has miles to go in fighting malnutrition

Why overnight volatility has increased in global equity markets

India and decoupling

India launches an experiment with digital banking

Multiple adversities warp improving prospects for cotton spinning mills

The eurozone economies have no choice but to tackle the supply shock together (republished from the FT)

Electoral Bonds | Increasing reporting, mandatory disclosures required for more transparency

Technical Picks: Axis Bank, Turmeric, REC and ITC (These are published every trading day before markets open and can be read on the app).

Ravi KrishnanMoneycontrol Pro