For the country’s largest consumer goods company Hindustan Unilever (HUL), rural market volume turned positive only in the April-June quarter. It had declined in double digits in the past. Its rival, Dabur India, which has a significant share in rural markets, is also seeing signs of improvement.
However, inflation was high for most of FY2023. This means the earnings of low-income families —those in rural areas as well as minimum wage earners in urban areas — have broadly been stagnant. But a moderation in inflation, apart from factors such as increased government spend and a rise in incomes, is expected to aid consumer sentiment and, in turn, spending.
In an interview, Marico MD and CEO Saugata Gupta said ‘multiple Black Swan events’ were exacerbating inflationary pressures, and companies will have to absorb short-term margin erosion