Growth, margins play whack-a-mole with consumer discretionary space

Some brokerages bet on consumer staples, preferring this more defensive space

The consumer discretionary segment had a muted October-December quarter (third quarter, or Q3) in 2022-23 (FY23), pegged back by weak consumer sentiment. Most sub-categories across price segments bore the brunt. Given sluggish demand conditions and an operational miss in Q3FY23, brokerages expect the trend to prolong in 2023-24 (FY24).

PhillipCapital projects consumer discretionary companies to slacken in FY24 as discretionary consumption takes a possible hit due to high consumer price index-based inflation, job layoffs/slowdown in hiring, a sharp increase in interest rates on home loans, the comeback of local/regional players, and exhaustion of pandemic-spurred savings impacting high-ticket purchase of paints/jewellery.