What India Inc.'s Q3 Show Reveals

With the bulk of the Q3 results season behind us, here's corporate India's unofficial 'state of the economy' report

- Abhishek Mukherjee

Whatever you can say about India, the opposite is also true, an exasperated Cambridge economist once quipped. On the macroeconomic front, while the country's waning GDP growth and sputtering mass consumption are eliciting a lot of hand-wringing, not a week goes by without Gurugram or Mumbai reporting such an unreal real estate deal that it puts even the French Riviera to shame.

Small cars are struggling to sell, but many premium sports utility vehicles (SUVs) have waiting periods stretching on for almost a year. Biscuit packs priced at ₹10 are being deemed expensive in some pockets, but demand for deluxe artisanal chocolates is insatiable. And so on.

For a nation as vast and diverse as India, government-issued statistics often fail to capture the economic zeitgeist and undercurrents powering the world's fifth-largest economy. Which is why the quarterly results of corporate India can offer a better glimpse into vital economic trends and prevalent consumer behaviours.

With the bulk of the Q3 results season behind us, here's corporate India's unofficial State of the Economy report.

Staples and Struggles

India's largest fast-moving consumer goods (FMCG) company, Hindustan Unilever (HUL), considered a proxy for the broader consumer sentiment in the country, has once again disappointed the Street with underwhelming numbers.

December-quarter revenues declined nearly 1% sequentially to stand at ₹15,408 crore. The annual growth was modest at 1.4%. Underlying volume growth, a key metric which measures the increase in sales minus the impact of price changes, was flat year-on-year—the weakest print in the past 12 quarters.

The weakness stemmed from moderation in urban demand (amid a sustained recovery in rural volumes) and negative mix partly due to an increase in the share of smaller packs, with consumers resorting to cost-cutting in the face of inflation and macroeconomic challenges.