News dalla rete ITA

21 Agosto 2023

India

VOLUME & MARGINS GROW AS INFLATION MODERATES, SMALL PLAYERS MAKE COMEBACK

The FMCG industry witnessed growth in volume and expansion in gross margins in the June quarter aided by moderation in inflation which also boosted small players in select categories. Several small players, which had earlier vacated some of the market segments during the peak of inflation, returned back and intensified the competition at the local level, forcing several big FMCG players to go for price corrections.Most of the listed FMCG entities reported volume-based growth in home care, personal care, beauty and foods products business, except the ice cream and beverages portfolio which was impacted by unseasonal rains in April and early May during the quarter.As material inflation reduced from high single digits to low single digits, there has been an uptick in volumes in both urban and rural markets, indicating promising signs of recovery in demand and makers including HUL, ITC, Godrej Consumer, Dabur, Marico and Tata Consumer are increasing spends on advertising and promotions.Moreover, FMCG players are now passing on the benefits of lower input costs to consumers, there is a sequential reduction in price growth. In anticipation of lower prices, FMCG companies are also now seeing trade reducing the stock levels by 1 to 3 days only, said one of the leading makers in its earning calls.Dabur India CEO Mohit Malhotra said: "During Q1/FY24, most of the economies witnessed a moderation in inflation. In India too, inflation showed signs of easing, as witnessed in both CPI and WPI data. With this moderation in inflation, there has been an uptick in volumes in both urban and rural markets, indicating promising signs of recovery in demand."He further said, "Now inflation is kind of abated in our portfolio" and will be "investing money back into advertising for surging demand".Dabur reported an increase of 5 per cent in net profit to Rs 464 crore in the June quarter and total income rose to Rs 3,240 crore.Bakery food company Britannia Industries reported a 35.65 per cent rise in consolidated net profit at Rs 455.45 crore and net sales were up 8.64 per cent to Rs 3,969.84 crore.However, Britannia Executive Vice Chairman & Managing Director Varun Berry also said: "In this quarter, commodity prices marginally softened & hence, the local competition intensified. In view of that situation, certain price corrections were initiated to remain competitive & continue to drive topline while maintaining profitability," said Berry.The local players, because of the pricing actions that they are taking in their small vicinities have gained a little bit of market share, he added in the earnings conference call.Leading FMCG maker HUL CFO Ritesh Tiwari in the earnings call said: "We are also seeing the resurgence of small and regional players in select categories and price points, many of whom had vacated the market during peak of inflation."HUL reported an underlying sales growth of 7 per cent and underlying volume growth of 3 per cent. Its consolidated sales were up 6.34 per cent to Rs 15,240 crore in the June quarter."Market volumes are recovering, although gradually. Rural market volume growth has just turned positive in the quarter, and we are seeing sequential improvements," said HUL CEO and MD Rohit Jawa.Conglomerate ITC's revenue from FMCG products rose 16 per cent in the June quarter to Rs 5,172.71 crore. This was led by strong growth in categories such as - staples, biscuits, noodles, beverages, dairy, agarbatti and premium soaps."The businesses continued to drive improvement in profitability through multi-pronged interventions viz premiumisation, supply chain optimisation, judicious pricing actions, digital initiatives, strategic cost management and fiscal incentives," said ITC in its earning statement.Godrej Consumer Products Ltd (GCPL) delivered double-digit volume growth of 10 per cent in Indian business, with a broad-based performance by Home Care and Personal Care business.Its consolidated net profit grew 19 per cent year-on-year (without exceptional item) and sales of Godrej group's FMCG arm was up 10.45 per cent at Rs 3,417.86 crore......Read more at:https://economictimes.indiatimes.com/industry/cons-products/fmcg/fmcg-in-june-qtr-volume-margins-grow-as-inflation-moderates-small-players-make-comeback/articleshow/102878503.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst (ICE MUMBAI)


Fonte notizia: The Economic Times