New Delhi, April 12 -- The Indian consumer sector will see a gradual recovery starting from the first quarter of financial year 2026 (Q1FY26), driven by encouraging signs of rural revival, even as urban demand remains tepid in the near term, according to a report by HDFC Securities.

The report adds that the key indicators, such as healthy reservoir levels, increased state welfare initiatives targeting women, and a strong budgetary push towards rural development are expected to support rural consumption.

"Green shoots have been observed regarding rural recovery, which will support companies moving forward from next quarter onwards," the report added.

Meanwhile, the report highlights that the urban recovery is likely to take shape over t...