Active Stocks
Mon Apr 15 2024 15:59:36
  1. Tata Steel share price
  2. 160.90 -1.59%
  1. ITC share price
  2. 425.90 -0.98%
  1. State Bank Of India share price
  2. 757.75 -1.17%
  1. ICICI Bank share price
  2. 1,078.80 -2.30%
  1. NTPC share price
  2. 361.35 -0.08%
Business News/ Markets / Mark To Market/  How deep is the consumption slowdown? Bajaj Finance gives hints
BackBack

How deep is the consumption slowdown? Bajaj Finance gives hints

Sanjiv Bajaj, managing director of Bajaj Finserve thinks the slowdown is 'dramatic'
  • The fact that consumption stocks haven’t seen great days, shows that Indians have begun postponing their purchases
  • Bajaj Finance’s business model is wrapped around hooking Indians to consume, one equated monthly instalment (EMI) after another. (iStock)Premium
    Bajaj Finance’s business model is wrapped around hooking Indians to consume, one equated monthly instalment (EMI) after another. (iStock)

    How deep is the consumption slowdown? While everybody in the market has been asking the question, not many have an answer. Sanjiv Bajaj, managing director of Bajaj Finserve that has a thriving business of consumer loans under Bajaj Finance, thinks the slowdown is “dramatic".

    Bajaj, in a CNBC-TV18 interview on Monday, said the company had seen lower growth in the first quarter of FY19. The 8% drop in Bajaj Finance stock on Monday should give some hint as to how this fear has gripped the market.

    The fact that consumption stocks haven’t seen great days and revenue growth looks benign, for everyone from toothpaste makers to home appliance builders, shows that Indians have begun postponing their purchases.

    Bajaj Finance’s business model is wrapped around hooking Indians to consume, one equated monthly instalment (EMI) after another.

    Bajaj finds unusual that television sales are lower even as a mega event like cricket World Cup series is on. Indians can never get enough of cricket and how much of this drop in television numbers is due to shift to streaming services is unclear.

    HDFC Bank, another lender with more than half of its loan portfolio consisting of retail loans saw its growth drop to multi-quarter lows in April-June period, the lender said in a pre-earnings release on Monday.

    The upshot is that the consumption slowdown is real and in Bajaj’s words dramatic.

    As our column pointed out last week, the commentary from consumer staples companies is not encouraging.

    With the Union Budget giving no immediate fillip to consumption, all eyes are now on monetary policy to push consumption demand. Even so, it is likely that it could get worse before it gets better and most analysts are foreseeing a delay in consumption revival.


    Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

    Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
    More Less
    Published: 09 Jul 2019, 09:59 AM IST
    Next Story footLogo
    Recommended For You
    GENIE RECOMMENDS

    Get the best recommendations on Stocks, Mutual Funds and more based on your Risk profile!

    Let’s get started
    Switch to the Mint app for fast and personalized news - Get App