scorecardresearchFMCG companies see high single to double-digit sales growth in March quarter: Report

FMCG companies see high single to double-digit sales growth in March quarter: Report

Updated: 08 Apr 2022, 09:17 AM IST
TL;DR.

Consumers are turning to cheaper alternatives or smaller packs when FMCG companies announce price hikes.

FMCG companies have been under pressure from high commodity price Inflation.

FMCG companies have been under pressure from high commodity price Inflation.

Consumer goods companies are expected to post high single-digit revenue growth in the March quarter, said Financial Express.  

The report said this hike in sales could be on the back of price rises caused by inflation on the back of Ukraine-Russia War. 

It has been a year since fast-moving consumer goods (FMCG) companies have been under pressure from high commodity price inflation, which has risen further since the Russia-Ukraine war broke out in February.

Companies have been hiking prices across categories but they are also absorbing a large portion of these hikes putting pressure of profit margins.

Rising prices will also result in reduced volumes as customers downgrade to cheaper alternatives or smaller packs in various categories to relieve financial stress.

Marico said that its consolidated revenue growth in the quarter touched high single digits. Volumes were marginally positive on an exceptionally high base of 25%, leading to double-digit volume growth on a two-year CAGR basis.

Company's worldwide business grew by double digits in constant currency on a solid foundation, with all markets performing well. Due to a price increase in edible and crude oil.

Marico implemented gradual price hikes in its line of value-added hair oils and Saffola food oils. As a result, the company anticipates that its gross margin will be comparable to the same quarter last year.

Titan Company stated that it expects revenue to fall by 3% year on year for the March quarter. According to the company's quarterly update, consumer sentiment has been negatively impacted by a rapid spike and volatility in gold prices, as well as worry owing to a fragile geopolitical scenario.

In its quarterly update to stock markets, Godrej Consumer Products (GCPL) stated that it expects to deliver double-digit sales growth in the quarter ended March 2022, which will be driven solely by price.

During the January-March 2022 period, the company witnessed mixed results in both personal care and home care divisions.

"In terms of profitability, we anticipate lower year-on-year Ebitda margins throughout the quarter." This is due to input inflation as well as our poor performance in Indonesia," GCPL said.

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The FMCG sector is likely to reach 16.3 lakh-crore by 2025.
First Published: 08 Apr 2022, 09:17 AM IST