What festive cheer could have in store for these sectors in 2025

While the final report card of how well this festival season fared will come in with time, here is a look at what numbers say about the reliance of various sectors of the economy on this crucial period. The charts explain why this year mattered for them—and what could be in store.

Automobiles

Automakers were quick to pass on GST cuts to consumers, aiming to boost sales volume and revive growth. It’s no wonder why: Facing a prolonged demand slowdown, India’s auto sector was betting its fortunes entirely on the festive season. After years of underperformance, the Auto stocks index has seen the trend of typically outpacing the frontline Sensex around major festivals, reflecting strong investor optimism for the sector during these periods.

A Mint analysis of historical data from the government’s Vahan database confirms there is a bump in vehicle sales during the festival season months—and a drop thereafter.

Consumer durables

Demand for consumer electronics during the festive season has been muted in recent years, with weak affordability, subdued sentiment, and high input costs weighing on sales and profits. Sales of consumer durables had been lacklustre during festive celebrations over the last two years as high inflation levels and existing household debt weighed on purchase decisions of the Indian middle class.

Over the past two years, consumer durable sales had picked up in December when AC discounts rise, showing that weather patterns drive durable demand more than festive sentiment in India. This year, tax cuts immediately sparked consumer interest in ACs and TVs, with rising Google search trends confirming the demand. Brands swiftly capitalized by passing on the benefits through discounts and tempting festive offers.

FMCG

While the Diwali season is a critical one for many sectors, for the FMCG sector, it is more of a mixed bag, with exceptions. At an overall level, be it sales or profits, the share of the October-December quarter is not noticeably more significant than in other quarters. This could partly be an artifact of accounting, with some companies choosing to ‘smooth’ out earnings across quarters.

But dig deeper into sub-sectors, and trends start to emerge. For example, smaller companies tend to see smaller margins in this quarter than bigger players. Or, Indian companies in personal care and foods book more of their profits this quarter than multinational companies.

An analysis of the quarterly results of 103 listed companies in the FMCG sector shows that the Diwali quarter does not account for an outsized share of their sales or operating profit. Larger companies in the FMCG sector as a whole tend to have a more consistent earnings profile in the Diwali quarter, than smaller companies.

One thing that remains constant even in the Diwali season is that bigger FMCG companies enjoy higher margins. Two segments—personal care, and food and dairy products—account for about two-thirds of FMCG sales. In these, Indian-owned companies, as opposed to multinationals, tend to book more of their profits in the October-December quarter.

Paints

Diwali has, historically, been an important time for the paints sector. In the festive season, consumers tend to splurge on giving their houses a new coat of paint, even a makeover. Real estate deals, which, in turn, lead to spending on interiors for new houses, also see an uptick. But the paints sector is also going through a competitive churn. New companies have entered, putting pressure on margins. The stakes have increased, compelling existing players to compete hard to hold on to market share this festive season.

Gross margins tend to be higher in the Diwali quarter (Q3), leading to a stronger-than-usual impact on bottom lines. For leading paint companies, Q3 tends to make up an outsized share of their full-year profit. But this Diwali is likely to have been competitive. The strength of consumer spending in general has also been in question for several quarters now, leading to slower-than-normal volume growth for industry leaders Asian Paints and Berger Paints.

Textiles

There is unlikely to be much Diwali cheer for the Indian textiles and apparel industry. That dampener has everything to do with the cascading effect of the tariffs imposed by US President Donald Trump on Indian goods. There’s the immediate financial hit.

There’s also the redrawing of a buyer-supplier balance that had been put into place painstakingly over many years, and the lingering uncertainty over a new Indo-US trade deal that restores status quo. The biggest Diwali gift for the industry then could be some thaw in Indo-US relations on the trade front.