Menon said the first trend is a clear pickup in discretionary categories. “The demand uptick is visible,” he said, noting that many companies are seeing stronger volumes after price reductions. Using an example, he said a shampoo priced earlier at ₹500 now costs around ₹440 after discounts, and “the volume uptick seems to be fairly material.” In soaps, he added, consumers are moving toward more premium brands such as Dove or Fiama as certain price points have become more attractive.
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He said the second half of the year is tracking better than the first, though ICICI Securities has not yet changed its formal estimates. Existing forecasts for 2025-26 (FY26) already incorporate a recovery, and Menon said industry veterans who experienced earlier tax reforms expect “price elasticity gains” to support demand going into 2026-27.
On the paints sector, Menon said competitive intensity has not reduced. “I really don’t think it has waned,” he said, although disruption from Birla Opus is easing as primary sales stabilise. He pointed to a long-term industry pattern: two weak years often followed by two strong years. Since 2023-24 (FY24) and 2024-25 (FY25) were weak, “there is a fair amount of optimism” for a better cycle ahead. He said Asian Paints needs to consolidate after its recent rally but remains a preferred pick. He also highlighted Indigo Paints as an outperformer during industry upcycles because, as a smaller player, it gains share faster when demand improves.
Addressing pricing risks, Menon said the recent rupee weakness is not yet large enough to justify price increases. “I’d be surprised if any of the companies implement a price increase for the next three to six months,” he said. Companies are expected to prioritise volumes over margins, especially after GST-linked price reductions.
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On individual names, Menon remains positive on Titan and Nestle. He said Titan’s management is consistent in its focus on growth, and the company’s work in reducing gold price premiums supports faster expansion. Nestle, he said, is well-positioned for an urban demand recovery. “Urban consumption making a comeback is a matter of time,” he said, adding that Nestle’s categories like chocolates and noodles will benefit from GST structures that reduce incentives for informal competition.
On Honasa Consumer, Menon said the company’s acquisition of Regimen is strategically sound. The brand has a meaningful D2C presence and strong traction in southern markets through vernacular communication. He believes Honasa is constructing a multi-brand portfolio similar to global peers. He expects Mamaearth to return to double-digit growth by 2026-27, with DermaCo and Aqualogica also crossing meaningful revenue milestones.
For the full interview, watch the accompanying video
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Edited by : prashanth perumal