The commentary for the consumer sector indicated continued weak rural demand, but most of the companies also stated that there were some green shoots on rural consumption towards the end of the quarter that persisted into January 2023.
There was also hope expressed that the likely good Rabi harvest along with a decline in CPI inflation would spur staples demand, albeit, gradually. Commodity cost deflation, on the other hand, barring palm oil and some crude derivatives (such as VAM) is not reducing to the extent that was expected, thereby delaying gross margin recovery.
The clear disappointment was caused by the sudden decline in discretionary consumption even in urban areas and corporate commentary suggested that while December and January were not as bad as November 2022 in terms of demand slowdown, it still remains sluggish with lack of clarity on the time of revival, the report said.
Most of the Banks have guided for a sustained momentum in loan growth powered by continuous traction in the retail, business banking and SME segments. Corporate segment is witnessing a healthy recovery driven by working capital loans and a healthy pipeline of sanctions.
The Lending Institutions guided for a sustained momentum in disbursements across product segments even though there was some sluggishness in prime mortgages. Within vehicle finance, disbursements remained strong across product segments though the 2W volumes have not yet fully recovered. Higher interest rates impacted demand for prime mortgages adversely but demand for affordable housing loans continued to remain strong.
(Sanjeev Sharma can be reached at Sanjeev.s@ians.in)
–IANS<br>san/dpb
