India Strategy Report Back
Rural India: Signs of rural pickup more evident

2QFY18 corporate commentaries point towards rural demand pickup After three years of subdued rural consumption, there are now increasing signs of a pickup. As we had pointed out in August, catalysts are in place to drive the awaited revival in rural demand. While two successive years of normal monsoon portend well for farm output, the combination of MSP hikes, direct benefit transfers and farm loan waivers should drive up disposable incomes. Corporate commentary following the 2QFY18 results from B2C sectors like FMCG, Autos, Durables and Retail reaffirms our view. Quite a few FMCG companies see rural growth outpacing or at least matching urban growth after many quarters. Auto companies like Hero MotoCorp, M&M and Escorts also highlighted rural growth recovery. India Inc expects the demand trends to strengthen as we move into 2HFY18.