India Inc's festive boom has a bottom line twist

India's festive shopping season may be booming, but there's a catch. While consumer spending appears strong, companies face increased costs that could eat into their profits. Online sales reached Rs 24,200 crore in the first two days of the festival, with mobile phones leading the pack. Sales are expected to grow 25-29% year-over-year, with more shoppers flocking to Tier II cities and rural areas.

However, many consumers are motivated by deals and discounts, and some may have to stretch their finances with affordable EMIs. Companies are experiencing cost pressures across various sectors. With inflation affecting raw materials, freight, fuel, and packaging, FMCG firms face higher prices for essential ingredients. Automakers grapple with rising costs for steel, aluminium, rubber, and precious metals.

Apparel manufacturers must contend with higher wages, logistics costs, and promotional expenses. Despite these challenges, companies are trying to maintain a balance between meeting demand and managing input costs, using strategies like selective price hikes, product adjustments, and focusing on higher-end variants.