The Consumer Goods Market Exhibits Recovering Signs

consumer goods market

Fast-moving consumer goods companies are likely to report volume growth in the mid-single to low-double digits and margin relief for the March quarter, as prices of key commodities indicate a decline.

In its quarterly report released on Thursday, Dabur India Ltd reported a modest improvement in demand across urban and rural markets, but not enough for a full recovery.

“While urban markets have reverted to positive volume growth, rural markets continue to be stagnant. Despite near-term consumer pressure, there are signs of improvement, including moderated inflation, a rise in consumer confidence, and an increase in government spending.” The business informed the exchanges. It is anticipated that Dabur’s consolidated revenue will increase by a mid-single-digit percentage in the fourth quarter.

Analysts at Nuvama Institutional Equities anticipate companies under their watch to report average quarterly volume growth of 6.18 percent. Meanwhile, Motilal Oswal Investment Services said volume growth is likely to remain subdued for FMCG companies during the quarter, “especially so, as there are no obvious indications of a revival in rural demand”. It anticipates that the majority of firms will report single-digit volume growth for the March quarter.

Godrej Consumer Products Ltd. (GCPL) reported that demand in India remained stable throughout the quarter and that the FMCG sector is anticipated to experience a progressive recovery in development. The company anticipates double-digit growth for the current quarter.

“Our India operations have exceeded expectations, particularly in terms of volume.” We anticipate double-digit growth in both volume and value. The volume and value of our domestic brand business grew by double-digit percentages. This is consistent with our plan to initiate volume-driven category development. Overall, expansion was widespread, driven by double-digit volume and value increases in both home care and personal care, “according to the update.

Analysts at Nuvama anticipate a return to volume growth for soaps as a consequence of GCPL’s 9–10% price reductions on soaps in the fiscal third quarter.

Analysts reported that urban markets continued to outperform rural markets, with the majority of businesses reporting lethargic demand in rural areas as inflation continued to strain household budgets. Consequently, companies with a larger exposure to rural areas may experience a lackluster performance, they continued.

“While urban and premium categories remained stable, easing commodity inflation augurs well for overall consumer trends, particularly in rural markets.” ” On April 3, Marico Ltd. announced in its quarterly report to the markets “While a more visible and sustained recovery in FMCG demand is anticipated based on a variety of increasing macroeconomic indicators, a robust monsoon will be essential for this to occur. The India business saw some year-over-year volume growth and remained in the mid-single digits compared to the previous quarters, “it added.

Analysts predicted that declining input costs would positively impact margins. In March, for instance, the price of crude oil fell 17.7% from the previous year, while the price of Malaysian palm oil fell 35.0%.

“Given a stronger product mix and deflated raw material costs, paint companies are likely to record improved year-over-year and sequential margins. Hindustan Unilever, Britannia, Berger Paints, and GCPL are likely to experience the greatest growth, while Emami, United Spirits, and Marico are likely to experience the lowest growth, “Nuvama analysts said.

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