TMS Ep424: Rural demand, FAME, QSR stocks, National Medical Devices Policy

India’s largest household goods maker, HUL, believes that rural slowdown is finally bottoming out. But the largest car maker of the country, Maruti Suzuki, has sounded a note of caution saying it has witnessed a decline in bookings in April. The reason? Elevated inflation and weakening consumer sentiments in rural areas due to uncertainty around monsoon. So as the companies with rural presence are coming out with results for last quarter of FY 23, what do they suggest about rural demand? Is it finally reviving? And what do they tell us about the state of our economy? 

Inflation has hit consumer spending across various sectors, from FMCG to automobile. The electric vehicle segment, however, has had an additional challenge. The government recently slapped a fine and deregistered two key players - Hero Electric and Okinawa Autotech - from its ambitious subsidy scheme to promote electric vehicles. The two companies were accused of misappropriating subsidies under the FAME-2 scheme. Ola Electric too was found involved, but it has accepted the violation and will reimburse the subsidy. So what went wrong with the FAME scheme? 

And it is not just the electric automobile sector. Quick-service-restaurant companies too, it seems, have hit rough weather. Higher raw material costs and subdued demand patterns have dented their near-term margin prospects. However, with their stocks seeing steep correction over the past six months, is there more downside in the offing? Or should investors use this decline as a buying opportunity for the long-term? 

After restaurants, let us shift our focus to the healthcare sector. Did you know that India still imports most of its high-end medical devices like MRI and CT scanners? And due to their high cost, the prices of health diagnosis and treatment is also high. But that may change soon. The government recently approved the National Medical Devices Policy, 2023. But what exactly is it? And how will the country benefit from it? Listen to this episode of the podcast for answers.