Low consumption hits India Inc bottom line

New Delhi: India Inc's profitability moderated in 3QFY23. Corporate earnings were below expectations during the quarter dragged by Commodities, while Financials and Autos held the fort. Broad-based slowdown in Consumption, both Staples and Discretionary, also hit corporate earnings, Motilal Oswal Financial Services said in a report.

The commentary for the consumer sector indicated continued weak rural demand, but most of the companies also stated that there were some green shoots on rural consumption towards the end of the quarter that persisted into January 2023.

There was also hope expressed that the likely good Rabi harvest along with a decline in CPI inflation would spur staples demand, albeit, gradually. Commodity cost deflation, on the other hand, barring palm oil and some crude derivatives is not reducing to the extent that was expected, thereby delaying gross margin recovery.