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<ul class="summary-list"><li>Hurricane Helene battered rural mountain towns in North Carolina, a key voting bloc for Trump.</li><li>Some analysts and candidates expect turnout to be lower in the region as people rebuild.</li></ul>Three weeks after Hurricane Helene ravaged western North Carolina, hundreds of roads and bridges <a target="_blank" href="https://www.ncdot.gov/news/press-releases/Pages/2024/2024-10-14-ncdot-hurricane-helene-recovery.aspx">remain damaged or closed</a> and tens of thousands of residents still don't have running water. Many are displaced after losing their homes and businesses, while others are still clearing out muck and debris.With many Helene survivors still in the thick of recovery, especially residents of rural mountain towns, political analysts and candidates told Business Insider they expect turnout to be lower in the state's western region. The <a target="_blank" href="https://projects.fivethirtyeight.com/polls/president-general/2024/north-carolina/">latest polls</a> show that former President Donald Trump and Vice President Kamala Harris are neck-and-neck, and North Carolina remains a critical battleground state for either candidate's victory."Voting is not the top priority for a whole lot of people right now," said Chris Cooper, a political science professor at Western Carolina University. "Even among the most committed voters. If they don't have drinkable water, their priorities have shuffled. So I expect voter turnout to be down in the most-affected counties."Cooper said his home was largely spared by Helene, but some family members who live in Asheville temporarily relocated to South Carolina. That includes his dad, who had planned to vote early and in-person but now must request a mail-in ballot.Early voting began in North Carolina on October 17, and <a target="_blank" rel="noopener noreferrer" class="c-link" href="https://www.ncsbe.gov/news/press-releases/2024/10/18/north-carolina-sets-turnout-record-first-day-early-voting">state election officials said in-person turnout topped a previous record set in 2020.</a> At the county level, state election officials told BI that comparing this year's numbers to 2020 wouldn't be accurate due to several caveats, including that the absentee-by-mail voting period started two weeks earlier in 2020 than it did this year.The rural mountain areas of North Carolina previously favored Trump. He won North Carolina by less than 75,000 votes in the 2020 presidential race, with strong support in areas outside urban centers. That included 11 of the 13 counties hardest-hit by Helene. The two exceptions were Buncombe County, where Asheville is located, and Watauga County.<div type="image" title="A man stands near a home with a Trump 2024 campaign sign as he coordinates relief in Lake Lure, North Carolina, on October 2, 2024 after Hurricane Helene." height="683" width="1024" msid="114380742" hostid="261" sizebytes="122340"></div>The Democrats aim to flip <a target="_blank" href="https://www.cnn.com/election/2020/results/state/north-carolina">historically red</a> North Carolina, seeing a path in the rapidly growing suburban areas like Charlotte, Raleigh-Durham, and Fayetteville. Harris is trying to win over Black and college educated voters, as well as women who oppose the state's <a target="_blank" href="https://www.plannedparenthood.org/planned-parenthood-south-atlantic/patients/health-care-services/abortion-services/nc-abortion-faqs">restrictive abortion law</a>. But the aftermath of Helene has become a political lightning rod, with Trump attacking the Biden administration's response.<h2 id="b6b2ed09-6d41-465a-9740-c901aa87fc11">Officials say North Carolinians know the importance of voting</h2>The traditional ways to reach people, such as door knocking and social media, aren't as accessible because of the destruction and spotty internet service. This has made it difficult for campaign staff to canvas and combat rumors.Trump has spread disinformation, telling attendees at a campaign rally that Harris stole Federal Emergency Management Agency (FEMA) disaster relief funding and spent it on housing for migrants. He also wrote on <a target="_blank" class="" href="https://truthsocial.com/@realDonaldTrump/posts/113227266617485932">Truth Social</a> that the federal government and Gov. Roy Cooper, a Democrat, were going out of their way to not assist Republican-leaning areas.The Biden administration and some GOP politicians have debunked the claims, including Rep. Chuck Edwards, a Republican who represents North Carolina's 11th district, which was devastated by Helene.Edwards told BI that he's been working around the clock to connect survivors with the resources they need. He <a target="_blank" href="https://edwards.house.gov/media/press-releases/debunking-helene-response-myths">issued a statement on October 8</a>, after being inundated with emails and calls from people upset about unfounded rumors."I was getting calls from people around the country who wanted to send personnel, equipment, and water, but worried it wouldn't make it to the right location because of the rumors," Edwards told BI. "Primarily, that FEMA was confiscating supplies and turning people away. There is absolutely no truth to that."Edwards added that even though folks are busy putting their lives back together, they understand that an important election is right around the corner. They are motivated to get out and vote for Trump, he said."They remember what our lives were like the day before the storm," Edwards said, pointing to inflation, oil prices, and a crisis at the Southern border.Edwards' competitor, Rep. Caleb Rudow, is a Democrat who represents Buncombe county in the state legislature. He's been canvassing and posting <a target="_blank" href="https://x.com/CalebRudow/status/1846144971256057972">on social media</a>, talking about the importance of this election, particularly after Helene.Rudow said the state needs elected officials who want to solve the climate crisis, which is fueling more intense hurricanes. He also told BI that the relief work by state, local, and federal officials after Helene has shown the power of government in the wake of a disaster.Rudow added that people are resilient, and part of recovery is getting life back to normal. That includes talking about these issues and voting.Even so, people who've lost their homes and loved ones probably aren't thinking about voting, said Bob Phillips, executive director at Common Cause North Carolina, a voter rights group. But it's hard to predict how Helene will affect turnout.North Carolina election officials made emergency changes to expand voting access for residents recovering from the storm."Helene will be a part of this election, and we'll just have to see what the drop off is," Phillips said.Were you impacted by Hurricane Helene and want to share your voting story? Contact cboudreau@businessinsider.com.

Rural North Carolinians are key for Trump's election chances in the swing state. Hurricane Helene upended their lives.

<ul class="summary-list"><li>A doctor shortage is projected to hit 86,000 by 2036. Rural communities already feel the impact.</li><li>Educational initiatives and congressional bills aim to combat issues like limited appointment slots.</li></ul>Every three to four months, Mellisa Case drives three and a half hours from her small town of Prineville, Oregon, to Portland to see her orthopedist for help with arthritis, a condition she believes she could have avoided at this stage in her life.In 2021, Case had surgery for a meniscus tear at an orthopedic center in Bend, an hour away from her home. However, she couldn't schedule appointments for follow-up care, which doctors consider necessary for proper recovery. For several months after her meniscus surgery, Case kept calling the center for an appointment with no success while her knee deteriorated.Now Case takes time off from work and spends up to $125 round trip on gas while traveling to Portland for arthritis care. Case said that symptoms like stiffness, swelling, and discomfort — which resulted from a lack of postsurgical medical support — could interfere with her sleep, gait, and ability to enjoy her hobbies like hiking and gardening."Until you've experienced not being able to see a doctor, you don't really realize how frustrating it is," Case, who is 53, told Business Insider. Eventually, she will need surgery for a <a target="_blank" class="" href="https://www.businessinsider.com/nc-woman-plans-finally-getting-knee-surgery-after-winning-lottery-2023-1">full knee replacement</a>.Case said that she remains concerned that the overall lack of medical care in her community, as she's observed doctors retiring or leaving her area.Some of her family members and friends also struggle to find physicians close to home, Case said, so they have to drive long distances or wait for appointments.A March report from the Association of American Medical Colleges projected that the US would face a <a target="_blank" class="" href="https://www.businessinsider.com/why-hospital-wait-times-are-bad-physician-shortage-low-pay-2024-4">physician shortage</a> of up to 86,000 specialists and primary-care doctors by 2036.Michael Dill, the organization's director of workforce studies, said this estimate was conservative."The country needs hundreds of thousands of doctors to provide an equal amount of care to everyone, including minorities, those without medical insurance, and people living in rural areas," he told BI.An aging population, physician retirement, and the administrative challenges of running a practice contribute to the shortage and disproportionally affect vulnerable populations such as older people, those lacking transportation options, and people with disabilities, public-health advocates told BI.Two solutions could be increasing medical-training programs in rural communities and passing legislation to retain and <a target="_blank" class="" href="https://www.businessinsider.com/best-high-paying-jobs-hiring-doctors-construction-accounting-2024-4">bolster the physician workforce</a>.<h2 id="0a289233-786f-4ff1-969a-24da2c3ab5eb">An aging population and provider burnout are contributing to a worsening doctor shortage</h2>The effects of a doctor shortage are already here, Dr. Bruce Scott, the president of the American Medical Association, said.Scott practices in Louisville, Kentucky, and said that in addition to patients in rural areas driving hours to appointments, they're waiting months to see a doctor.Various factors, including an aging population, play a part in the situation, Dill said.In 2020, 55.8 million Americans, or 16.8% of the population, were 65 or older, and by 2030, all baby boomers will have reached age 65, according to a <a target="_blank" class="" href="https://www.census.gov/library/stories/2023/05/2020-census-united-states-older-population-grew.html ">US Census report.</a> As people age, they require more physician services, such as cardiologic or neurological care, and at the same time, doctors are aging and retiring, adding to the shortage, Dill said.<a target="_blank" class="" href="https://www.businessinsider.com/labor-shortage-hospital-beds-empty-nurses-doctors-staff-covid-vaccine-2021-10">Physician burnout</a> further exacerbates the problem, Scott said. In one survey that was part of AMA Organizational Biopsy report, of over 12,400 doctors, 48% of respondents said they were burned out. In another survey from the same report, one in three respondents said they planned to retire or reduce hours within two years.One AMA survey found some doctors were leaving their practices because they were being paid less to handle more <a target="_blank" class="" href="https://www.businessinsider.com/electric-health-records-causing-doctor-burnout-2018-12">administrative burdens</a>, such as spending 12 hours a week filling out prior-authorization requests. "Medicare is paying us nearly 30% less in 2024 than it did in 2001, when adjusted for inflation," Scott said, citing further data compiled by the AMA.<h2 id="1d068686-c4d6-4ee0-81d9-f17918ad516a">Strategies to alleviate the shortage</h2>To help alleviate the physician shortage in rural areas, medical students need to receive training there, said Molly Fox, the vice president of institutional advancement at Kansas Health Science University."We engage students with the rural community because we know that people tend to practice where they feel connected," Fox said.At KHSU's Kansas College of Osteopathic Medicine, for example, third- and fourth-year students can complete clinical rotations at St. Catherine Hospital in Garden City, four hours from Wichita, where the university is.Chase Hearn, a third-year student, said he'd seen doctors at the hospital who have worked 26-hour shifts to meet patient needs."I've also heard patients say they can't take a day off work to travel 200 miles to see their OB-GYN," Hearn said. He added that his training had strengthened his resolve to practice in a rural community but that he anticipated challenges, like burnout and working with patients who lack consistent access to care.<a target="_blank" class="" href="https://www.businessinsider.com/how-el-paso-trying-solve-us-physician-shortage-2023-7">Rural residency programs</a> are also needed to address the shortage, Dill said. Only 2% of residency training occurs in rural areas, the US Government Accountability Office says.A residency program through Oregon Health &amp; Sciences University aims to alleviate the doctor shortage in three central-Oregon counties, including Crook County, where Case lives. The program is training physicians in primary care, family birthing, emergency medicine, behavioral health, and hospital medicine.According to the Rural Medical Training Collaborative, 133 rural residencies in family medicine and 69 rural-track programs are recruiting for 2025 enrollment, along with 30 internal-medicine residencies and 16 psychiatry residencies.Several pieces of legislation have also been introduced to Congress to address the doctor shortage. Scott said bills to adjust Medicare payments for doctors — no matter where they practice — to the annual rate of inflation and rules to reduce the need for prior authorization could help ease administrative burdens.Some legislation, if passed, would specifically influence rural areas.For example, HR 7855, the Association of American Medical Colleges-endorsed Rural Residency Planning and Development Act of 2024, would codify the Rural Residency Planning and Development Program, which funds the startup costs of residency training in rural areas, Dill said. From 2019 to 2024, the program has enabled the launch of 46 accredited rural residency programs across 38 states and Puerto Rico.Hollie Davis Frick, an immigration lawyer for Wintersteen Patel Law Group, said congressional action could easily incentivize doctors born abroad and who receive advanced medical training in the US to remain here and practice in rural areas."Many doctors who come here for residencies and fellowships return abroad because of our ineffective immigration policies," Davis Frick said.If passed, S 665, the Conrad State 30 and Physician Access Reauthorization Act, would allow state health departments to sponsor additional visa waivers for foreign-born doctors who agree to practice in underserved areas within those states.While Case remains skeptical that doctor-training initiatives and legislation will directly affect her community anytime soon, she considers herself fortunate, she said."I have the ability to drive, afford travel expenses, and pay for out-of-network doctors," Case said. "Not everybody does."

Medical schools and legislation aim to address a worsening doctor shortage that's already hitting rural communities 

<ul><li>A <keyword id="48670" type="General" weightage="20" keywordseo="Morgan-Stanley" source="Orion">Morgan Stanley</keyword> report says that rural demand is set to rebound, helped by wider reopening, improving labour market and more.</li><li>Its rural activity tracker has picked up in the last 3-4 months.</li><li>Rural wages have been showing improvement in August and rural unemployment hit an 8-month low in September.</li><li>The structural outlook of rural areas is improving as well – thanks to policymakers’ focus on boosting rural incomes.</li></ul>Rural economy is all set for a rebound as per readings from four key indicators – employment, credit offtake, auto sales and trade, according to a recent report by Morgan Stanley. “We believe rural demand is set to rebound, helped by wider reopening, improving labour market conditions, and improving terms of trade for the rural sector,” the report said. Apart from increasing food inflation since the start of this financial year, India’s villages have been suffering from the effects of the second wave of the pandemic – which dislocated livelihoods. Government spending too was reduced, as compared to the first wave. However, the tide seems to be turning. “High-frequency data suggest that overall economic activity has been normalising over the past three months after remaining sluggish in the trailing 12 months. Our consolidated rural activity tracker shows a pickup in YoY terms over the last 3-4 months,” the report said. Cyclical outlook The first indicator is the unemployment rate which hit an 8-month low in September, as per CMIE. Secondly, two-wheeler sales reached 1.1 million in September, its highest since the pre-pandemic month of October 2020. Agricultural credit growth also hit its highest in nine months in August – at 13.4%. “Even as agriculture exports have been impacted by policy decisions to restrict exports of wheat and rice, they have grown 27.5% in the financial year to date FY23. The terms of trade are now turning with non-food inflation moderating,” Morgan Stanley said. An increase in hiring in the informal sector and more employment opportunities in the semi-skilled space will also help improve rural household incomes, as per the report. Normalised activity will also boost monetary transfers from urban to rural areas - and give a much-needed fillip to the rural economy. Moreover, rural wages – both farm and non-farm — have shown an improvement in August. “Rural wages are steady in nominal terms and probably at trough in real terms,” the report said. Structurally speaking Apart from the cyclical outlook, the structural outlook of rural areas is improving as well – thanks to policymakers’ focus on boosting rural incomes. Apart from improving agricultural productivity, they are building infrastructure, industry and services along with skill-building of the rural labour force. “Progress has already been made in physical infrastructure, connectivity and digital infrastructure, and we expect policymakers to continue to focus on boosting productivity across the rural economy,” the report said. While government spending in rural areas has reduced since the start of the pandemic, it’s still at 3.3% of the GDP — well above the pre-pandemic levels. However, Morgan Stanley also insists that there are risks associated with their assumptions on <keyword id="9592296" type="General" weightage="20" keywordseo="Rural-recovery" source="Orion">rural recovery</keyword>. They include slower-than-expected improvement in contact-intensive services segment growth, weak job creation in the semi-skilled segment, and an increase in commodity prices — which will increase non-food inflation and worsen terms of trade for the rural sector. Monsoons: Scarcity plus surplus The biggest drag however is the patchy monsoon this year. While rainfall was 6% above last year’s rainfall, as much as 40% of the total area received excess rainfall and six regions (17% of total) in the north and north-eastern parts of the country recorded a deficit. As per the full-season data, decline in kharif acreage touched 0.8% year-on-year as the deficit in rice sowing – a key summer crop – remains steady at 4.8%. Sowing declined the most for rice, followed by pulses and oilseeds. “The first advance estimates show rice production likely to be 6.8mn tons lower than in 2021. We will continue to monitor the government's measures to regulate the supply and demand balance in this area through procurement and other actions. Separately, the reservoir level is at 108% of the 2021 level, which is likely to support the winter cropping season,” the report said. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/corporates/news/two-in-three-ceos-in-india-expect-a-recession-in-12-months-says-survey/articleshow/94934951.cms">Two in three CEOs in India expect a recession in 12 months says survey</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/news/indians-above-40-are-feeling-younger-healthier-than-gen-z-millennials-report/articleshow/94918231.cms">Indians above 40 are feeling younger &amp; healthier than Gen Z, millennials - report</a>

Rural recovery underway says Morgan Stanley

<ul><li>Consumption gaps between urban and rural markets narrowed down in the December quarter, for the first time in 2023.</li><li>Modern trade saw double-digit growth in consumption, but growth in <keyword id="20479724" type="General" weightage="20" keywordseo="traditional-trade" source="keywords">traditional trade</keyword> slipped sequentially.</li><li>Non-food category volumes grew sequentially but that of food slowed down, led by staples and impulse categories. </li></ul>Even as FMCG sales growth has been moderating on a sequential basis, sales of noodles and biscuits saw an uptick in the rural markets in the December quarter, says a NielsenIQ report. Rural markets too saw a sequential-quarterly decline, but consumption gaps between urban and rural markets narrowed down for the first time in 2023, in the December quarter. The North and West regions contributed to this phenomenon, the report says. “Despite a sequential-quarter decline, the rural recovery narrative continued to evolve throughout the year. In Q4 2023, we observe an uptick in consumption, primarily driven by habit-forming categories (such as biscuits and noodles) in food and essential home products. These categories have thrived despite flat to negative price growth, indicating resilience and sustained demand,” said <keyword id="20476060" type="General" weightage="20" keywordseo="roosevelt-dsouza" source="keywords">Roosevelt Dsouza</keyword>, Head of Customer Success – India, <keyword id="20475890" type="General" weightage="20" keywordseo="niq" source="keywords">NIQ</keyword>. The rural areas are also seeing a growing preference for larger packs, while urban markets see a persistent preference for larger packs, the report said. It says that the FMCG industry experienced a 6% growth in value, attributed to a 6.4% increase in volume. However, on a sequential basis, there is a moderation in consumption growth, it adds. The pricing growth in the overall fell to 2.7% in Q3, due to the price cuts taken across categories by FMCG majors to fight off competition. In the December quarter of last year, it was 10%, as per Nielsen data. FMCG major <keyword id="19948892" type="General" weightage="20" keywordseo="hul" source="keywords">HUL</keyword> said that in Q3, its volumes grew 2% in Q3, but its value growth fell marginally by 0.3%. Marico’s domestic volumes grew 2% during the quarter, with a flat value growth. <keyword id="20021294" type="General" weightage="20" keywordseo="kirana" source="keywords">Kirana</keyword> continue to suffer Modern trade which consists of supermarkets, hypermarkets and such has seen a double-digit growth in consumption at 16.8%. Traditional Trade which consists of kiranas or mom-and-pop stores saw a 5.3% growth in consumption, falling from 7.5% in the Q2 of FY24. “Despite certain challenges, the positive momentum in modern trade adds a promising dimension to the overall market scenario,” Nielsen says. Non-food categories grow faster The volume growth in general is also much faster for non-food categories. Though more units were purchased in food categories compared to the same period last year, non-foods saw more large packs being purchased. The volume growth in the food sector was at 5.3% YoY, but it was at 8.7% in Q2 of FY23. This slowdown in growth is primarily due to staples (such as refined and non-refined edible oils, etc.) and impulse categories such as confectionery. In non-food categories, volumes grew at 9.6% in Q3 FY24 — higher than the 8.7% recorded in Q2. This improvement can be attributed to an increase in rural consumption growth, with a growth rate of 9.8% (vs. 6.7% in Q2), Nielsen says. “Volume growth is attributed to home care products like detergent cakes and bars, washing powder; and personal care like toilet soaps categories in rural areas,” the report said. In urban areas, the non-food sector is witnessing slower consumption growth, with a growth rate of 9.4% in Q3, slightly down from 10.4% in Q2.

Amidst slowdown, noodle and biscuit sales see an uptick in rural areas

<ul><li>Volume contraction for the FMCG sector was more pronounced in rural areas, says a <keyword id="87153" type="General" weightage="80" keywordseo="bnp-paribas" source="Orion">BNP Paribas</keyword> report. </li><li>While the research firm expects margin improvement in FY24, its earnings estimates are below consensus on account of INR depreciation, increase in ad spends and selective price cuts. </li><li>We think consensus earnings estimates for FY24/25 are too optimistic, the report says. </li><li>The valuation multiples of Indian FMCG companies have expanded since June 2022, BNP Paribas says. </li></ul>Consumer goods majors have been hit hard by inflation over the last few quarters, with volume growth taking a backseat. Clearly, growth has been driven by multiple price hikes that were taken by the players – and not volume growth. The road ahead looks better as commodity prices are cooling and price cuts could even spur consumption. In spite of the fact that affluent India’s consumption is holding up well, volumes from mass-market and categories that benefitted from Covid like healthcare and hygiene segments <a href="https://www.businessinsider.in/finance/article/inflation-burns-a-hole-in-the-pockets-of-indias-lower-income-households-from-fmcg-goods-flip-flops-to-crackers-consumption-takes-a-backseat/articleshow/95536971.cms">were affected by inflation</a>. “Revenue growth was driven by price hikes, with volumes remaining subdued across categories. The volume contraction was more pronounced in rural areas. Companies expect rural demand to recover in the second half of FY23, on the back of government interventions, a good monsoon and higher crop realisations,” says BNP Paribas. Ad spends and price cuts Going forward, BNP shares the optimism of the companies that the second half of the current financial year will bode well for revenues and margins too as commodity prices are moderating. “While we expect margin improvement in FY24, our earnings estimates are below consensus as we anticipate INR depreciation, an increase in advertisement spends and selective price cuts to drive volumes that are under pressure,” said the research firm. Lower ad spends in addition to a cut in corporate tax rates have been aiding the sector’s earnings growth for the last five fiscal years in spite of muted growth in revenues and gross profits. But now ad spends might resume to bring back consumers who have been downtrading to cheaper unbranded products for the last six months, leaving little scope for a strong margin recovery. Lower estimates, pricier stocks BNP Paribas raised its sales estimates for most companies during the earnings season but lowered the aggregate EBITDA margin for the sector by 30 bps to 20.9-22.1% for FY23 and FY24 – thereby reducing EBITDA as well as earning per share by 1-2% for both the years. “While the outlook for FY24 is positive, driven by moderation in raw material costs and signs of a <keyword id="9592296" type="General" weightage="20" keywordseo="rural-recovery" source="Orion">rural recovery</keyword>, we think consensus earnings estimates for FY24/25 are too optimistic. With no triggers for a sharp multiple de-rating, we believe some stocks can see time correction over the next year. Our preferred sector picks remain ITC, Britannia, Emami and Jubilant Foodworks,” said the report. Most FMCG stocks have been on a bull run in the last five months, and that has made them expensive relative to the tough conditions that await for its volume growth. “Since June 2022, the valuation multiples of Indian FMCG companies have expanded as concerns about unabated inflation eased. This has led to several stocks moving above their five-year mean next twelve months, price to earnings ratio,” the report said. The downside risks that the research firm sees include an increase in competitive intensity, leading to companies cutting prices and sales growing at a lower-than-expected rate; and lower-than-expected margin recovery. Rural recovery to be affected by muted Kharif season Many economists and rating agencies are also questioning the pace of economic growth of the country – marred by <a href="https://www.businessinsider.in/finance/news/no-end-to-downgrades-in-gdp-estimates-as-economists-remain-divided-on-severity-of-slowdown/articleshow/95847763.cms">constant downgrades</a>. Apart from global spillovers, experts believe that a lot is riding on the rural recovery – that will play a big role in the volume and revenue growth of FMCG majors. While there have been green shoots of recovery seen in <a href="https://www.businessinsider.in/business/auto/news/mixed-demand-trends-for-autos-in-november-as-festive-boost-wears-off-but-signs-of-rural-recovery-visible/articleshow/95848505.cms">spurts like auto sales</a>, rural consumption has remained muted even after lockdowns ended. A major driver for rural recovery is a good Kharif crop, which, however, has been affected by erratic monsoons this year. “Untimely heavy rainfall in the states across North-west and Central India between end-September 2022 and mid-October 2022 is likely to have added to the moisture levels of the standing crop, which poses some downside risks to the kharif output relative to the first Advance Estimates,” said an ICRA report. SEE ALSO <a href="https://www.businessinsider.in/business/news/vikram-kirloskar-the-mit-engineer-who-loved-to-build-factories/articleshow/95875911.cms">Vikram Kirloskar: The MIT engineer who loved to build factories</a> <a href="https://www.businessinsider.in/business/corporates/article/tatas-mega-aviation-merger-is-poised-for-flight-but-the-skies-are-not-clear-yet/articleshow/95526116.cms">Tata's mega aviation merger is poised for flight, but the skies are not clear yet</a>

India FMCG sector profits may be weighed by ad spend hikes, price cuts: BNP Paribas

<ul><li>Inflation has been eating into the purchasing power of lower and middle income groups with many essentials’ sales falling.</li><li>Majority of the upper and upper middle class respondents saw their household incomes go up more than inflation.</li><li>There is a dichotomy seen in online festive sales too as premium products are bought with discounts and purchase options say experts. </li></ul>There are two Indias within the great sub-continent. One where the day-breaking drink of tea has become dearer for many this year and the other half is doubling down on wine purchases. Neither of them are affected by the base effect of last year. <keyword id="2653343" type="General" weightage="20" keywordseo="tea-sales" source="Orion">Tea sales</keyword> were down last year too, and <keyword id="806378" type="General" weightage="20" keywordseo="wine-sales" source="Orion">wine sales</keyword> were up — darkening the ‘K’ line on economic recovery charts. Madan Sabnavis, the chief economist of Bank of Baroda calls it a schizophrenic pattern of consumption. “Sales are doing better in categories where price does not matter,” he tells Business Insider India. <div type="image" title="grocery demand" msid="104810160" hostid="261" caption="&amp;lt;p&amp;gt;Source: Pixabay &amp;lt;/p&amp;gt;"></div> It’s discretion not price The categories of goods where price matters are seeing low growth in output – a reflection of demand. Some of the casualties are detergent powders, groundnut oils, shampoos and hair dyes. Their output fell between April to August 2023, compared to the year before, as per BoB economics research. Inflation has a more indirect effect on these purchases. For example, tea and shampoo saw moderate inflation but their demand fell. Inflation was high in coffee, toothpaste and soaps but their demand grew. “The generalized inflation factor has been at work where real income has come down thus leading to lower purchasing power,” said BoB. In a survey conducted by UBS, about 46% of respondents said that they’re buying less personal care and packaged food compared to last year. For purchase of home care products, the respondents were largely neutral versus last year, it added. India’s largest FMCG player Hindustan Unilever with a large presence across rural and urban India has seen a direct impact of it in the quarter that ended in September 2023. Its overall urban volumes grew 3% and rural volumes fell 1%. “Rural recovery is likely to remain gradual,” the company said in its investor presentation indicating that the situation might not see any dramatic recovery in the coming months. Rural India saw reverse migration during the pandemic, but not all of them have gone back, opines Sabnavis. A chunk of downtrading is also being seen in urban areas amongst income groups that are facing the heat of inflation, experts add. At the other end This is, however, only one half of the story. At the other end, many Indians are not blinking while making discretionary purchases. A majority of the upper and middle class respondents – 65% – surveyed by UBS, saw their household incomes go up more than inflation. “The top 20% of the population account for the bulk of discretionary consumption. The survey results support our view that affluent consumers‘ income levels are holding up, as reflected in corporate wage growth that continues at double digits,” said UBS. Lalit Jhawar, co-founder and CEO, LandCraft Retail says that high-end gourmet products in urban areas have been steadily increasing over the last few years. He owns a luxury gourmet retails store- Food Square in Mumbai, which sells cheeses, truffles, caviar, artisanal breads and all the other international food items. “Affluence in urban areas has grown, resulting in a larger number of consumers with higher discretionary income,” Jhawar tells Business Insider India. Online sales: A story of dichotomy Another sign of higher spending is seen in the e-commerce festival sales. The first week of the many festival discount sales saw ₹47,000 crore worth of goods being sold, which is 19% higher than last year, says Redseer Consulting. Online sales, which now sees a good measure of metro and demand from Tier 2 and Tier 3 cities, is showing a dichotomy as well, say experts. “Two Indias have come into play where one India is saving up and waiting for prices to come down to clinch a good deal on premium products. On the other hand, there are low-value product sales i.e value-for-money purchases that are being bought more frequently,” said Abhishek Tandon, engagement manager at Redseer Strategy Consultants. The sale season, which is manna for bargain hunters, is also enthused by the number of Buy Now Pay Later and EMI options. “When it comes to big ticket purchases, premiumization is bolstered by financing options and discounts that make it affordable,” adds Tandon. In the pre-festive period between April and August,however, most consumer durable sales were in a negative zone, due to the high-base effect of last year, says Bank of Baroda’s report. Refrigerators, mobiles, readymade garments all showed a negative output – also indicating that discounts play a large role in discretionary purchases. Indian consumers have always been complicated and price has always played a big role in purchase decisions, choice of brands and more. But it’s no longer a linear story. One end of the market, driven by affluence, is veering towards premium purchases. The other end is looking for ways to survive with less in hand as inflation is eating into their purchasing power. SEE ALSO <a href="https://www.businessinsider.in/stock-market/news/mamaearth-this-fmcg-scion-is-all-set-to-gain-a-windfall-from-honasa-ipo/articleshow/104721052.cms">This FMCG scion is all set to gain a windfall from Honasa Consumer IPO</a> <a href="https://www.businessinsider.in/careers/news/genzs-millennials-wants-to-be-back-to-offices-even-as-costs-pinch/articleshow/104700780.cms">GenZs, millennials want to be back to offices even as costs pinch</a>

Wine vs Tea: India’s consumption trends show a sharp divergence

<ul><li>Indian auto companies are looking at mixed demand momentum after making merry post the festive season boost in October.</li><li>The festive boost last month lifted the number of registrations across the passenger vehicles (PV), commercial vehicles (CV) and tractors segments in the range of 35-66% when compared to October 2019.</li><li>However, PV sales are off to a slow start in the marriage season in November, despite an increase in discounts.</li><li>Two-wheeler registrations are also still below pre-Covid levels, but the urban markets are driving the demand for scooter and premium motorcycles, say analysts.</li></ul>Indian auto companies are looking at mixed demand momentum after making merry post the festive season boost in October. Retail data suggests that trends remain mixed across segments like two-wheelers, passenger vehicles, and commercial vehicles. The<a href="https://www.businessinsider.in/business/auto/news/indian-car-makers-drive-the-festive-boom-two-wheelers-showing-signs-of-revival/articleshow/95257140.cms"> festive boost in October</a> lifted the number of registrations across the passenger vehicles (PV), commercial vehicles (CV) and tractors segments in the range of 35-66% when compared to October 2019, according to a report by Jefferies. While the marriage season has set in now, a report by Yes Securities states that passenger vehicles are off to a slow start in November despite an increase in discounts compared to October. Commercial vehicles are also seeing an increase in inventories across companies, the report stated, adding “Large fleet operators have staggered their delivery schedules while retail customers' contribution is yet to come in full swing.” <cmsannotation type="cmsannotation" annotationid="Two-wheeler registrations still below pre-Covid levels" comment="subhead" text="Two-wheeler registrations still below pre-Covid levels">Two-wheeler registrations still below pre-Covid levels</cmsannotation> Two-wheeler registrations are still below pre-Covid levels, with Hero MotoCorp and TVS Motors expected to report a sequential decline in sales in the range of 14.2-17.9%, according to Yes Securities. In October, an Elara Securities<a href="https://www.businessinsider.in/business/auto/news/indian-car-makers-drive-the-festive-boom-two-wheelers-showing-signs-of-revival/articleshow/95257140.cms"> report</a> stated that Hero MotoCorp reported a 17% decline in its overall sales, while Bajaj Auto reported a 10% decline. The only gainer was TVS Motors, which reported a 1.5% increase year-on-year. Now, according to Yes Securities, overall two-wheeler retail sales could decline between 5-8% in November when compared to October. On a year-on-year basis, though, it notes that there could be flat to high-single digit growth. “Compared to the past few months, 2W demand saw some bounce back during this festive season. However, the registrations were far from reaching the pre-pandemic levels in 2019,” said Nikunj Sanghi, former president, Federation of Automobile Dealers Associations of India (FADA). <cmsannotation type="cmsannotation" annotationid="Marriage season off to a slow start, SUVs perform relatively better" comment="subhead" text="Marriage season off to a slow start, SUVs perform relatively better">Marriage season off to a slow start, SUVs perform relatively better</cmsannotation> The Yes Securities report observes that the trend of entry-level cars struggling has continued through November. Additionally, hatchbacks are also seeing a slow uptake from customers. Sports utility vehicles (SUV), on the other hand, are seeing relatively better demand. However, companies are still facing supply chain issues, which is hampering their overall sales. “PVs are still facing supply challenges in premium variants impacting overall model mix at retail level,” the report stated. <cmsannotation type="cmsannotation" annotationid="Higher discounts on entry-level cars as inventory builds up" comment="subhead" text="Higher discounts on entry-level cars as inventory builds up">Higher discounts on entry-level cars as inventory builds up</cmsannotation> Car makers are now offering higher discounts on entry-level cars as they attempt to reduce the inventory build-up, which has now increased to over 15 days, according to the Yes Securities report. For instance, <keyword id="44883" type="General" weightage="20" keywordseo="Maruti-Suzuki" source="Orion">Maruti Suzuki</keyword> has increased discounts in the range of ₹5,000-10,000, while Tata Motors is offering up to ₹10,000-15,000 more discounts in November, when compared to October. Overall, Maruti Suzuki, Tata Motors, and Mahindra &amp; Mahindra are offering discounts and benefits in the range of ₹28,000-65,000, depending on the car being bought. <cmsannotation type="cmsannotation" annotationid="Rural recovery signs visible" comment="subhead" text="Rural recovery signs visible">Rural recovery signs visible</cmsannotation> Rural India, a critical market especially for two-wheeler and tractor makers, is showing signs of a recovery, according to analysts at Motilal Oswal. “Rural recovery resulted in a healthy 26% and 30% YoY growth in 2W and tractor retails during festive season, respectively, even as secondary 2W dealers (mainly non-urban) saw strong demand revival,” the research firm said. The firm noted that despite the demand revival in the festive season, “full normalcy is yet to be achieved.” It added that urban markets continue to see better demand than rural markets, which reflects in the scooter and premium motorcycle segments’ growth. For instance, Royal Enfield’s Hunter 350, a premium motorcycle, has seen its waiting period increase from 1 month to 2.5-3 months, with dealer confidence seeing a sharp increase. “Channel partners we spoke to are indicating high confidence post launch of Hunter with their volumes are ~15% lower than FY18 levels but are back to FY19 levels,” the Yes Securities report stated. <cmsannotation type="cmsannotation" annotationid="Tighter cash flows and slower uptake leading to inventory build-up of trucks" comment="subhead" text="Tighter cash flows and slower uptake leading to inventory build-up of trucks">Tighter cash flows and slower uptake leading to inventory build-up of trucks</cmsannotation> Commercial vehicles like trucks continue to witness an inventory build-up, with the key market of the northern belt witnessing under-utilisation, according to Yes Securities. Making matters worse and adding to the uncertainty is the ban on construction activities in the Delhi-NCR region, and schools being shut due to pollution. This has impacted the demand for both buses and trucks, according to analysts. According to Yes Securities, tighter cash flows due to an increase in working capital requirements, customers have delayed delivery plans of booked vehicles, adding to the build-up of inventories. <div type="javascript" title="Custom" contenttype="Text"><cdata><![CDATA[]]></cdata></div> SEE ALSO: <a href="https://www.businessinsider.in/business/auto/news/indian-car-makers-drive-the-festive-boom-two-wheelers-showing-signs-of-revival/articleshow/95257140.cms">Indian car makers drive the festive boom, two-wheelers showing signs of revival</a> <a href="https://www.businessinsider.in/stock-market/news/a-year-after-market-debut-paytm-is-the-worst-performer-among-recent-large-ipos-cartrade-policybazaar-and-lic-join-the-party/articleshow/95762071.cms">A year after market debut, Paytm is the worst performer among recent large IPOs – Cartrade, Policybazaar and LIC join the party</a> <a href="https://www.businessinsider.in/stock-market/news/india-vix-cools-down-to-pre-covid-levels-heres-why-and-where-it-is-headed/articleshow/95743166.cms">India VIX cools down to pre-Covid levels – here’s why and where it is headed</a>

Mixed demand trends for autos in November as festive boost wears off but signs of rural recovery visible

<ul class="summary-list"><li>The American Red Cross responds to nearly twice as many disasters today compared with a decade ago.</li><li>The US has already seen 15 billion-dollar disasters in 2023 so far.</li><li>The relief group plans to spend $1 billion over the next few years on more staff and financial aid.</li></ul>Hurricane Idalia, which struck western Florida on Wednesday and moved through the Carolinas as a tropical storm, could be the opening round of what scientists predict <a target="_blank" href="https://newsletter.businessinsider.com/click/32565684.5796/aHR0cHM6Ly93d3cubm9hYS5nb3YvbmV3cy1yZWxlYXNlL25vYWEtZm9yZWNhc3RlcnMtaW5jcmVhc2UtYXRsYW50aWMtaHVycmljYW5lLXNlYXNvbi1wcmVkaWN0aW9uLXRvLWFib3ZlLW5vcm1hbD91dG1fbWVkaXVtPW5ld3NsZXR0ZXImZW1haWw9Y2JvdWRyZWF1JTQwaW5zaWRlci5jb20meD04MTI4ZTI5ZTMwN2Q4YzI2MjI4NzBjNDNkMmU4MzFhMjJjZTUwMDkyNTVhMTUwZDU0NzE3MDM1ZThjYjBkMGE2/628bdf90094963f5ad0eef3eB65b0114d">will be an "above normal" Atlantic hurricane season</a>. Officials <a target="_blank" href="https://newsletter.businessinsider.com/click/32565684.5796/aHR0cHM6Ly93d3cuZmxvcmlkYWRpc2FzdGVyLm9yZy9ldmFjdWF0aW9uLW9yZGVycy8_dXRtX21lZGl1bT1uZXdzbGV0dGVyJmVtYWlsPWNib3VkcmVhdSU0MGluc2lkZXIuY29tJng9ODEyOGUyOWUzMDdkOGMyNjIyODcwYzQzZDJlODMxYTIyY2U1MDA5MjU1YTE1MGQ1NDcxNzAzNWU4Y2IwZDBhNg/628bdf90094963f5ad0eef3eB5c01f592">in about two dozen counties ordered residents</a> to evacuate from the Big Bend region, where the Florida Panhandle curves into the peninsula, and hundreds of thousands were without power. During these major disasters, many evacuees head to shelters run by the American Red Cross, which is racing to expand its services as hurricanes, flooding, and wildfires become more extreme due to the climate crisis. Just before Hurricane Idalia made landfall, the relief organization <a target="_blank" href="https://newsletter.businessinsider.com/click/32565684.5796/aHR0cHM6Ly93d3cucmVkY3Jvc3Mub3JnL2Fib3V0LXVzL25ld3MtYW5kLWV2ZW50cy9wcmVzcy1yZWxlYXNlLzIwMjMvcmVkLWNyb3NzLWhlbHBzLWNvbW11bml0aWVzLWRldmFzdGF0ZWQtYnktdGhlLWNsaW1hdGUtY3Jpc2lzLmh0bWw_dXRtX21lZGl1bT1uZXdzbGV0dGVyJmVtYWlsPWNib3VkcmVhdSU0MGluc2lkZXIuY29tJng9ODEyOGUyOWUzMDdkOGMyNjIyODcwYzQzZDJlODMxYTIyY2U1MDA5MjU1YTE1MGQ1NDcxNzAzNWU4Y2IwZDBhNg/628bdf90094963f5ad0eef3eBe6293296">announced that it plans to spend</a> at least $1 billion over the next several years to respond to climate-fueled disasters and support survivors for longer periods of time. "Today we're responding to nearly twice as many disasters as we were a decade ago," Jennifer Pipa, the American Red Cross' vice president of disaster programs, told Insider. "When we see that kind of monumental increase in demand for our services, we acknowledge that we can't continue to do the same way of business."So far this year, the US has already seen 15 billion-dollar disasters. The Red Cross has responded to <a target="_blank" href="https://newsletter.businessinsider.com/click/32565684.5796/aHR0cHM6Ly93d3cuYnVzaW5lc3NpbnNpZGVyLmNvbS9sYWhhaW5hLW1hdWktd2lsZGZpcmUtd2hhdC13ZW50LXdyb25nLWNsaW1hdGUtY29sb25pYWxpc20tMjAyMy04P3V0bV9tZWRpdW09bmV3c2xldHRlciZlbWFpbD1jYm91ZHJlYXUlNDBpbnNpZGVyLmNvbSZ4PTgxMjhlMjllMzA3ZDhjMjYyMjg3MGM0M2QyZTgzMWEyMmNlNTAwOTI1NWExNTBkNTQ3MTcwMzVlOGNiMGQwYTY/628bdf90094963f5ad0eef3eB06accbbe">the deadliest wildfire</a> of the last century in Maui, a typhoon that struck Guam in June, record rainfall and <a target="_blank" href="https://newsletter.businessinsider.com/click/32565684.5796/aHR0cHM6Ly93d3cuYnVzaW5lc3NpbnNpZGVyLmNvbS9zYWZlLXBsYWNlcy1mb3ItY2xpbWF0ZS1jaGFuZ2UtdmVybW9udC1mbG9vZHMtMjAyMy03P3V0bV9tZWRpdW09bmV3c2xldHRlciZlbWFpbD1jYm91ZHJlYXUlNDBpbnNpZGVyLmNvbSZ4PTgxMjhlMjllMzA3ZDhjMjYyMjg3MGM0M2QyZTgzMWEyMmNlNTAwOTI1NWExNTBkNTQ3MTcwMzVlOGNiMGQwYTY/628bdf90094963f5ad0eef3eB68871132">flooding in the Northeast</a>, <a target="_blank" href="https://newsletter.businessinsider.com/click/32565684.5796/aHR0cHM6Ly93d3cuYnVzaW5lc3NpbnNpZGVyLmNvbS9jYWxpZm9ybmlhLXJpdmVyLWluLXNreS1jYXVzZXMtZmxvb2RzLXRob3VzYW5kcy1ldmFjdWF0ZS0yLWRlYWQtMjAyMy0zP3V0bV9tZWRpdW09bmV3c2xldHRlciZlbWFpbD1jYm91ZHJlYXUlNDBpbnNpZGVyLmNvbSZ4PTgxMjhlMjllMzA3ZDhjMjYyMjg3MGM0M2QyZTgzMWEyMmNlNTAwOTI1NWExNTBkNTQ3MTcwMzVlOGNiMGQwYTY/628bdf90094963f5ad0eef3eBcf4a5c89">atmospheric rivers</a> and a tropical storm in California, wildfires up and down the West Coast, and deadly tornadoes in the South and Midwest. The Red Cross and other emergency responders are sometimes forced to return to the same places year after year when disasters strike, and they see the resiliency of those communities erode over time. Pipa said the average recovery time after natural disasters is longer, meaning people are staying in shelters longer and require extra support to transition to sustainable housing. "We've found that 60 to 90 days post-disaster, many national organizations that have come in to provide immediate support have left and are no longer present, so resources aren't available for families," Pipa said. "That's why we're bringing in what we call bridge assistance."To address longer-term needs, the Red Cross has identified some of the most vulnerable communities and is providing families with more direct financial aid for security deposits, home repairs, and child care. The relief organization is also extending case work for up to a year, which assists people with access to healthcare, food, and housing. Nearly 400 households affected by Hurricane Ian in 2022 and the atmospheric rivers in California have participated. The Red Cross is adding 69 staffers, the majority of whom will be located at the local level. By the end of 2024, these employees will be in 15 counties across a dozen states.Establishing relationships with small nonprofits, religious organizations, and other community groups before disaster strikes is also part of the strategy, Pipa said. These groups don't always know how to plug in to a disaster-relief operation or access federal dollars, but they're often critical to delivering food to rural residents or providing healthcare."There are three distinct barriers to recovery: housing, food insecurity, and physical and mental health," Pipa said. "Those are all things that we see consistently keep folks from transitioning from shelters to their next recovery step. The Red Cross won't ever be everything to everyone. So connecting families with community partners that have expertise in these areas results in better outcomes for families."

The climate crisis is forcing the American Red Cross to expand its disaster-recovery work

<ul><li>Auto sales in January 2023 were down 8% from the pre-Covid month of January 2020, says data from FADA. </li><li>Cost of ownership has shot up significantly while disposable income has not increased in the same ratio, says Manish Raj Singhania, president of FADA. </li><li>The 3-wheeler segment has almost clawed back to pre-pandemic levels. </li><li>FADA predicts that China’s factory activity gaining pace can fuel further growth in passenger vehicle sales. </li></ul>Compared to last year, India’s <keyword id="8834104" type="General" weightage="20" keywordseo="january-auto-sales" source="Orion">January auto sales</keyword> are robust as total vehicles sold increased by around 14%. But that, however, is not the whole story. Even as the pandemic seems to be behind us, auto sales have not yet reached their pre-Covid levels. As compared to January 2020, auto sales in January 2023 were down by 8%, says data by Federation of Automobile Dealers Associations or FADA. “While sentiments are improving at a snail’s pace and are better than what it was a year ago, rural market is yet to fully come to the party as cost of ownership has shot up significantly while disposable income has not increased in the same ratio,” said Manish Raj Singhania, president of FADA. A recent report by JM Financial also said that the Union Budget 2023-24 had no specific triggers for rural growth. That would affect their spending capability with a spillover effect on the 2-wheeler segment. “In the absence of a specific focus on the rural economy in the Union Budget for 2023-24, analysts don't see immediate triggers for revival in the rural economy. Moreover, in the absence of specific or enhancement of allocation towards the rural economy, we believe that the rural environment would have to revive on its own. Hence, we would view businesses dealing with price-sensitive low-ticket items as less likely to benefit,” the JM Financial report said. When compared to January 2021 and pre-covid month of January 2020, sales of two-wheelers fell by 7% and 13%, respectively. However, on a year-on-year basis (compared to January 2022), it did show a growth of 10%. The economic survey 2022-23 tabled in the Parliament said that rural wages will rise at a steady positive rate as inflation is expected to soften thus translating into rise in real wages. “We are hopeful that this will have its rub-off effect with a rise in 2-wheeler sales going ahead,” FADA says in its outlook. January 2023 auto sales data <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Category </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">January 2023 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">January 2022 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">YOY change </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2- Wheeler </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"> 12,65,069 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">11,49,351 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">10% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">3- Wheeler </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">65,796 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"> 41,487 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">58.6% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Passenger Vehicles </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">3,40,220 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2,79,050 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"> 21.9% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Tractor </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">73,156 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"> 67,764 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7.96% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Commercial Vehicles </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"> 82,428 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">70,853 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">16.3% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Total (incl others) </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">18,26,669 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">16,08,505 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">13.56% </td></tr></tbody></table>Source: FADA 3Ws win the race Three-wheelers (3Ws), on the other hand, are having a much better run. Not only did they show a robust growth since last year, they are also closing the gap with the pre-Covid levels. They are down by a mere 3% as compared to the pre-Covid levels with a robust year-on-year growth of 59%. “EV FAME-2 subsidy along with demand from commercial 3W space is fuelling healthy growth. The segment has shown tremendous resilience and has almost clawed back to pre-pandemic levels,” FADA said. It also hopes that the enhanced income tax rebate can accelerate the demand for 2Ws as well as entry-level passenger vehicles (PVs). The PV segment continues to perform well with a growth of 22% year-on-year. It has also grown 8% from its pre-Covid levels. “While good enquiry, healthy bookings and improved supplies are helping aid this segment, it is the entry level sub-segment which is still feeling the pinch,” said Singhania. While waiting periods for some models have come down, compact SUVs, SUVs and luxury vehicles continue to witness minimum waiting of 2-3 months. FADA predicts that with China’s factory activity once again gaining pace, global supplies of parts and semiconductors will see a recovery, thus aiding better vehicle supplies and lower waiting period in future. “This will further fuel growth for the already healthy passenger vehicle category,” the industry body says. The Commercial Vehicle (CV) category has also shown robust growth by growing 16% year-on-year, and 6% from the pre-Covid month of January 2020. Continued demand in the market due to replacement of fleet, growth in freight availability and government’s consistent push for infrastructure projects has helped the CV segment rise above pre-Covid numbers. “The capital outlay of ₹10 lakh crore for infrastructure spending will help aid CV sales, which is already witnessing an upswing,” FADA says, adding that reduction in surcharge for highest tax payers could also benefit high-end vehicle sales. SEE ALSO <a href="https://www.businessinsider.in/budget/news/indias-rich-to-shell-out-more-for-luxury-cars-global-travel-but-may-have-more-to-invest/articleshow/97551072.cms">India’s rich to shell out more for luxury cars, global travel but may have more to invest</a> <a href="https://www.businessinsider.in/business/news/reinvent-for-the-future-like-tom-cruise-in-top-gun-maverick-says-kumar-mangalam-birla/articleshow/97280286.cms">Reinvent for the future like Tom Cruise in Top Gun Maverick says Kumar Mangalam Birla</a>

January auto sales rise 14% y-o-y but sentiment improving at a snail’s pace, says FADA

Encouraged by volume growth, margin improvement and recovery in rural sales, India's top fast-moving consumer goods (FMCG) companies are now back to their normal growth cycle as they step up investments as well as spending on advertising and marketing. <keyword id="84065" type="General" weightage="20" keywordseo="fmcg-companies" source="Orion">FMCG companies</keyword> are chasing volume growth again after a gap of a few quarters, offering higher grammage and price cuts thanks to inflationary pressures softening on key raw materials for everything from soaps to food items. Hindustan Unilever (HUL), Dabur, Marico, Godrej Consumer Products, ITC, Tata Consumer Products and Nestle reported volume recovery in the March quarter and said they expect a gradual pickup in consumption in FY24. "The prospects of a sustained recovery have strengthened. After five quarters of volume decline, the sector has posted volume growth," Marico MD and CEO Saugata Gupta said in the company's earnings conference call. "Urban consumption has been steady while rural is showing some convincing signs of having bottomed out." Foods continue to drive growth for the sector, while the home and personal care segment also entered positive territory after an extended slowdown. Marico, which owns popular brands like Saffola, Parachute and Livon, reported an 18.7 per cent increase in its consolidated net profit to Rs 305 crore for the fourth quarter ended March 2023 while sales rose 3.65 per cent to Rs 2,240 crore, driven by single-digit volume growth and moderation in commodity prices. HUL said rural areas have shown improvement with higher value growth sequentially. While HUL's volumes continue to fall, the extent of decline has reduced versus last quarter. "The slowdown in the FMCG market is bottoming out. This improvement was led by volumes, which have turned flat in this quarter, versus a mid-single-digit decline in the December quarter," said HUL CFO Ritesh Tiwari in its earnings call. The makers of popular brands such as Rin, Lux, Surf Excel and Pond's said it expects the price-volume growth to rebalance further. "We expect volumes to recover gradually due to high levels of cumulative inflation and the fact that consumption habits typically recover with a lag," he said. For the March quarter, HUL reported an increase of 12.74 per cent in its consolidated net profit to Rs 2,601 crore. Net sales rose 10.83 per cent to Rs 14,926 crore. However, HUL warned the near-term operating environment is likely to remain volatile due to global slowdown risk and uncertainty related to weather phenomena like El Nino and heatwaves. Abneesh Roy, Nuvama Group Executive Director for Institutional Equities, said the outlook for the <keyword id="495979" type="General" weightage="20" keywordseo="fmcg-industry" source="Orion">FMCG industry</keyword> was "positive" with volume growth and improvement in margins for most companies in FY24. "As raw material prices are cooling off, companies shall start paring prices via grammage increase or gradual price reductions. Price growth shall ease while volume growth will improve," he said. Roy also cautioned about the impact of El Nino and the "aggression" from billionaire Mukesh Ambani-led Reliance Industries Ltd, a known disrupter, which aims to be a big player in the USD 110-billion FMCG segment. Meanwhile, Godrej Consumer reported an 11.47 per cent increase in its India revenue to Rs 1,822.92 crore in the March quarter. This was led by volume growth of 11 per cent. Its home care segment, which consists of household insecticides and air fresheners, grew 14 per cent and 17 per cent, respectively. "We expect to build on the current momentum and deliver volume-led growth along with upfront marketing investments and improvement in profitability," said its Managing Director and CEO Sudhir Sitapati. Britannia Executive Vice-Chairman and Managing Director Varun Berry also expressed optimism. "Volume growth will be certainly much better than this year," he said. On commodity prices, Berry said there is deflation in prices of palm oil, laminates and corrugated material for packing but flour and milk prices are soaring. "There are certain brands and certain packs where we have already initiated price reductions or promotions," he said. In the March quarter, Britannia reported a 47.53 per cent jump in consolidated net profit to Rs 557.60 crore. Its revenue from operations rose 10.93 per cent to Rs 3,892.02. Similarly, Dabur reported volume growth of 11 per cent during the March quarter and 14 per cent for FY23. Its quarterly net profit was Rs 292.76 crore and revenue from operations stood at Rs 2,677.8 crore. "Despite near-term concerns around inflationary pressures, we plan to accelerate the growth momentum by continuing to invest in brand building, innovation, and capabilities that will drive growth," said Dabur India CEO Mohit Malhotra. Other companies also recorded growth. ITC's revenue from the FMCG segment rose 19.34 per cent to Rs 4,951.17 crore from Rs 4,148.62 crore while EBITDA jumped 76 per cent. Nestle, the maker of Maggi, Kitkat and Nescafe, reported an increase of 24.69 per cent in its net profit to Rs 736.64 crore in the March quarter. Sales rose 20.43 per cent to Rs 4,808.40 crore. Tata Consumer reported a 21.12 per cent rise in its consolidated net profit to Rs 289.56 crore. Its revenue from operations was up 13.96 per cent at Rs 3,618.73 crore. Tata Consumer said it recorded growth in the India beverages business and food. It had a "strong margin growth and strong topline growth driven both by volume and price," the company said in its earnings call. "We have started seeing volume growth coming back. The impact of inflation and monetary tightening on economic growth and demand seems to be slowing down, but I would keep my fingers crossed and monitor it closely," said Tata Consumer MD and CEO Sunil D'Souza. "In the near term, we are seeing stability." SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/corporates/news/zomato-net-loss-narrows-to-188-crore-in-q4-revenue-rises-70-yoy/articleshow/100358894.cms">Zomato net loss narrows to ₹188 crore in Q4, revenue rises 70% YoY</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/news/mankind-pharma-pnb-among-stocks-to-become-largecap-from-midcap-mutibagger-rail-vikas-nigam-to-turn-midcap-from-smallcap/articleshow/100356527.cms">Mankind Pharma, PNB among stocks to become largecap from midcap; mutibagger Rail Vikas Nigam to turn midcap from smallcap</a>

FMCG makers expect sustained recovery in volume and margins with price reduction in FY24

<ul><li>According to Nielsen India’s latest report, rural India saw 3X growth than the rest of India in June. </li><li>Reverse migration expected to give a positive uptick.</li></ul>Nielsen’s latest report revealed that rural areas are driving the growth for our country. It saw 3X growth in June than the rest of India. Lower COVID incidence, government stimulus and agricultural impetus are boosting the rural consumer sentiment. <div type="image" title="rural india growth" msid="77258173" hostid="261"></div> The report further explains the key reasons behind this growth: <ul><li>Lower COVID cases in Rural</li><li>Reverse migration expected to give a positive uptick</li><li>MNREGA wages at an all time high</li><li>Rural disbursement more than 2X of same period last year</li><li>The progress of the southwest monsoon so far has been bountiful. Flood impact very low compared to last year, restricted to 2-3 states</li><li>40-60% higher water availability in reservoirs</li><li>Increased sowing acreage</li><li>The Rabi harvest in April was good and with a good monsoon Kharif harvest is expected to augurs well too</li><li>The MSP prices for crops have also seen a significant increase</li></ul>

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