HOW RECOVERY IN RURAL INDIA COULD HELP YOU

THE underperformance of the consumer sector in India tells a story.

- RAJAS KELKAR

Over the past five years, the BSE fast-moving consumer goods index has underperformed the BSE Sensex by a margin.

Over the years, India's consumer sector has been the pillar of growth. However, the COVID-19 pandemic, inflation and little or no wage growth stalled the march.

Much campaigning focused on the rural distress during the run-up to the election. The opposition parties in India have been highlighting it in every political rally. If you are a regular reader of quarterly financial data, you would have noticed that companies in the consumer sector have flagged the rural consumption weakness every quarter.

Many companies have announced quarterly results and continue to brief the market on the situation. In the latest quarterly filings, there are signs of a turnaround. Companies are commenting positively on prospects for future sales in rural India.

For example, Asian Paints, the largest paints company, relies on rural recovery and has said that rural markets are responding better than before in the latest quarter. While the urban market is growing strong, the company hopes the recovery in rural India will push up sales in the coming quarters.