How is Festive Demand Driving India's Consumer Spending in Jewellery and Liquor?
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Synopsis
The Indian consumer sector is witnessing a notable recovery in Q2 FY26, predominantly led by the jewellery and liquor segments. This growth is fueled by festive demand and premiumization, indicating a shift in consumer behavior post-GST transition. Discover the detailed insights from the latest report by Motilal Oswal Financial Services.
Key Takeaways
- Jewellery sector leads with 26% revenue growth.
- Liquor sector benefits from premiumization.
- Overall consumer sector revenue growth of 8% year-on-year.
- Paints sector shows signs of revival.
- Staples sector experiences muted performance post-GST.
New Delhi, Nov 24 (NationPress) The consumer landscape in India exhibited a diverse yet robust recovery during Q2 FY26, primarily driven by the jewellery and liquor sectors. Meanwhile, the paints, innerwear, and staples categories displayed early signs of progress as markets began to stabilize following the GST transition, according to a recent analysis.
According to the report from brokerage Motilal Oswal Financial Services Limited, strong festive demand coupled with premiumization fueled growth in both jewellery and liquor.
The analysis, which encompassed 60 companies with a total revenue of Rs 1.2 trillion in Q2 FY26, noted an 8 percent year-on-year revenue growth and a 4 percent EBITDA growth year-on-year.
In the first half of FY26, revenues surged by 10 percent while EBITDA increased by 3 percent, the report indicated.
The brokerage pointed out that jewellery emerged as a clear leader, achieving a remarkable 26 percent revenue growth and 25 percent EBITDA growth. The liquor sector also thrived, witnessing an 11 percent revenue growth and a 16 percent EBITDA growth due to premiumization.
Within the liquor category, spirits experienced significant growth, although beer sales were hindered by adverse weather conditions.
Paint manufacturers experienced a resurgence in demand starting September, driven by festive repainting and improved trade sentiment, with category revenues rising by 7 percent and EBITDA soaring by 17 percent.
The staples segment, however, reported a subdued performance in the wake of the GST transition and extended monsoon, recording a mere 1 percent revenue growth and flat EBITDA. Rural volumes increased by 5.7 percent, contrasting with a 1.9 percent growth in urban regions.
Quick-service restaurants had a slower quarter, registering a 10 percent revenue growth and 4 percent EBITDA growth.
The innerwear sector reported a 4 percent revenue growth, but EBITDA remained stagnant due to increased marketing expenses impacting margins.
Motilal Oswal projected a steady recovery for staples as GST volatility normalizes from November. It anticipates that the paints sector will strengthen in the upcoming quarters, with sustained growth in spirits attributed to premiumization and strong momentum in jewellery as the wedding season approaches.
Point of View
My perspective on this report highlights a significant shift in consumer trends in India. The resurgence in sectors like jewellery and liquor reflects a broader economic recovery, with festive demand acting as a catalyst. While some categories show improvement, it's crucial to monitor the evolving landscape post-GST transition. This report underscores the resilience of the Indian market, and we at NationPress will continue to provide updates as these trends develop.
NationPress
24/11/2025
Frequently Asked Questions
What sectors are driving consumer spending in India?
The jewellery and liquor sectors are leading the consumer spending recovery in India, according to recent reports.
How much revenue growth did Indian consumer sectors experience in Q2 FY26?
The Indian consumer sectors reported an 8% year-on-year revenue growth in Q2 FY26.
What is the impact of festive demand on jewellery and liquor?
Strong festive demand has significantly boosted both the jewellery and liquor sectors, contributing to their respective growth rates.
How did the innerwear and staples sectors perform?
The innerwear sector saw a 4% revenue growth, while the staples sector experienced muted performance with just 1% revenue growth.
What future trends are anticipated for the paints sector?
The paints sector is expected to strengthen in the coming quarters, driven by festive repainting and improved trade sentiment.
