Goldman Sachs: Strong FMCG Recovery, Caution on Discretionary Demand

• Goldman Sachs predicts strong recovery for India's FMCG sector, with mid-teen earnings growth after weak years.
• Tailwinds include GST rate cuts, easing input costs, and a favorable base, with improvement expected from Q3.
• FMCG earnings growth is accelerating, with many companies likely to report double-digit revenue growth in Q3.
• Caution remains on most discretionary segments like QSR, fashion, footwear due to weak demand, competition, and high valuations.
• Jewellery is an exception with strong demand; alcobev faces tax challenges, making conventional FMCG more attractive.

Why It Matters: FMCG set for strong recovery due to tailwinds, but discretionary demand remains a concern.