She added, “We continue to prefer discretionary over staples for medium to long term because we clearly see a longer runway of a very healthy revenue growth. Most of the companies, we recommend are looking at like 15% to 20% kind of growth trajectory, at least.”
Chopra said investor interest in the consumer space is increasingly focused on whether the recent recovery in demand can sustain, particularly as higher commodity costs start to put pressure on margins.
Staples companies reported strong volume growth in the first quarter, helped partly by measures introduced during 2025, including GST-related tailwinds.
However, the sharp rise in commodity inflation has complicated the outlook for the sector. Chopra said investors are now becoming more selective, with the focus shifting towards companies that can deliver both revenue growth and healthy profitability.
“The strategy is going to be more bottoms-up and not top-down,” Chopra said, pointing to a stock-specific approach rather than a broad view on the staples sector.
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Categories such as jewellery, grocery retail and eyewear are benefiting from this shift, providing greater confidence around the sustainability of mid-to-high teen growth rates, she said.
Within staples, however, the performance has increasingly diverged between companies that have successfully refreshed their portfolios and those that continue to depend heavily on a few established products or categories. Companies that have built newer growth engines have been rewarded with stronger valuations, while others have seen their multiples come under pressure.
The focus for consumer companies is also expected to move from revenue growth towards margins in the second half of the year. Rural demand has remained strong, while urban demand has shown signs of recovery. But continued price hikes could put the durability of volume growth under pressure.
If commodity inflation remains elevated, investors could reassess earnings expectations, making pricing power an important differentiator. Companies that can absorb higher costs or generate additional growth through internal initiatives could be better placed.
Chopra also highlighted quick commerce as an important growth opportunity for established consumer companies. While investors have largely viewed the channel as a source of competition, she expects incumbent players to increasingly use it to expand their reach and create new growth opportunities.
Within discretionary consumption, the outlook for quick service restaurants (QSRs) remains relatively cautious. Same-store sales growth has improved for several companies, but the recovery is coming from a weak base after two to two-and-a-half years of subdued performance.
The delivery advantage that once differentiated QSR brands has also weakened as aggregators have made food delivery more widely available. This means brands will need to create stronger differentiation to drive growth.
For full interview, watch accompanying video
