Consumption Revival in Rural and Urban Markets

This document is a sector update focusing on the consumption revival in both rural and urban markets as of August 2025. It outlines the government's initiatives, particularly the restructuring of GST rates aimed at reducing the tax burden on consumers, which is expected to stimulate consumption. The report notes that rural markets have shown signs of recovery after a challenging period, driven by improved macroeconomic conditions, including rising wages and government spending. Urban consumption, however, has faced challenges due to inflation and high interest rates, but there are indications of a potential recovery in the coming months. The document highlights the performance of FMCG companies and their strategies to adapt to changing consumer preferences, including new product launches targeting value segments. It also discusses the impact of easing commodity prices on gross margins and the overall earnings outlook for staple companies, suggesting a positive trend for the second half of FY26.