The analyst pointed out that recent data shows a promising uptick in aggregate volume growth over the last two quarters. This broad-based demand recovery signals that the sector is turning a corner.
“It’s not all in the future,” Mitra emphasised, noting that the growth is broad-based across most categories, even with price increases.
When asked about the balance between discretionary spending and staples, the top executive said the long-term outlook favours discretionary goods over staples as per capita income rises.
However, from an investment perspective, the risk-reward ratio may currently be more favourable for staples.
“As an investor, from a risk-reward perspective, staple items are probably slightly better right now than discretionary, but over the medium term discretionary will grow a little faster, save for the risk of competition,” he underlined.
Mitra also highlighted the growing dominance of digital platforms like Zepto, Swiggy and Zomato, which are outpacing traditional retail and branded goods suppliers.
“Across many segments, we have seen the platforms do better than the brands and do better than other physical retail options. So that’s something which is definitely a structural trend that’s going to continue for many years. And it will, whether the macro is good or bad.”
