Consumer – Sector Update – Demand trends mixed despite favorable macros
Published on 26 Feb 2026
Consumer sector is showing mixed signals in demand post GST transition. 3Q can’t be seen as a normal quarter given that GST transition got completed by mid Nov and early start to festival season, and that does show some impact of inventory re-stocking. We have been of the view that the growth acceleration in staples will be category specific (Link of note) like it had happened in FY18 and after consideration of the changed competitive scenario and distribution moats over the years. QSR’s have shown some green shoots, however structural demand recovery is yet to set in.
Paints segment continues to show sustained competitive intensity in decorative paints, although noise levels seem to be subsiding. Industrial Paints sems to be riding on growth led by Automotive and General Industrial paints demand. Jewellery players seem well placed due to high gold price inflation (80% YoY) and expected pressure on local and regional players. Food and grocery retailing is showing impact of rising competition from Quick commerce players as new players and scale benefit remain at play.
Britannia and MRCO are preferred plays in staples, Pidilite in construction aids and Titan Company/ JUBI in Jewellery/ QSR/retail. Any spike in input costs and El Nino disrupting monsoons can be a key risk to our call.
