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Internet sector Q3 results preview – Mixed signals, ICICI Securities

On-the-ground feedback reveals muted consumer spend across discretionary categories such as apparel, consumer durables, paints and quick service restaurants post the strong festive season.

Though such a trend is often attributed to consumer fatigue, this time the market commentary is hinting at more structural reasons. Among them are:

  1. muted hiring in the organised sector,
  2. inflation denting household savings, and
  3. increased interest rates (higher EMIs) lowering discretionary income.

On the other hand, rising Covid cases globally could also reverse the gains seen by offline retail during the festive season in favour of ecommerce. According to media reports, cloud kitchens saw 30-35% YoY increase in order volumes and Zomato Ltd. clocked 45% YoY increase on December 31, 2022. Bloomberg

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