Festive Season Outlook: Morgan Stanley Forecast for Urban Consumer Companies

Morgan Stanley expects urban consumer-focused companies in India to perform strongly during the upcoming festive season. The brokerage predicts that the last 45 days of the second quarter could see the best festive season in the past five years.

Retail and Discretionary Companies to Lead

Retailers and discretionary companies are likely to benefit the most during this period. Changes in GST rules may further increase demand for retail and discretionary products. On the other hand, FMCG companies may see slower growth than expected.

Key Company Projections

• Trent (Fashion): Expected to see a 25% year-on-year (YoY) revenue growth, up from 20% in the first quarter.
• Titan (Jewellery): Jewellery segment may grow by 12% YoY.
• DMart: Revenue expected to rise by 18% YoY.

Paints Sector Outlook

Competition in the paints sector will be a key focus. Asian Paints may see slower growth compared to its peers, while Berger Paints could gain market share and benefit during this festive season.

Conclusion

Overall, Morgan Stanley expects a strong festive season for Indian urban consumer companies, particularly for retailers, discretionary firms, and selected players in the paints sector. FMCG companies may experience more moderate growth in comparison.