Fast-Moving Consumer Goods (FMCG) players are expecting low to mid-single-digit domestic volume growth for the quarter that ended on December 31, 2023.

The sector during the quarter saw steady demand from the urban markets and an uptick in rural demand. 

“Domestic volumes grew in low single digits on a year-on-year basis with a slight sequential improvement in our core portfolio. Among key inputs, copra and edible oil prices remained at lower levels and crude derivatives also exhibited some downward bias, thereby leading to robust gross margin expansion on a y-o-y basis. A&P spending was ramped up in line with our strategic intent to continually strengthen the long-term equity of both the core and new franchises. Consequently, we expect low double-digit operating profit growth on the back of a healthy expansion in operating margin, thereby staying on track to deliver on the margin guidance for the full year,” FMCG major Marico stated in an exchange filing.

The company stated that it initiated steps to improve ROI in general trade channels including stock correction as it faced constraints on liquidity and profitability. Parachute coconut oil registered low single-digit volume growth while Saffola oils had an optically weak quarter owing to a high base and persistently cautious trade sentiment, even while offtakes remained healthy.

Meanwhile, Godrej Consumer Products witnessed broad-based growth across home and personal care with Park Avenue and KamaSutra brands reporting double-digit volume growth. Businessline had earlier reported that the FMCG major has ramped up advertising of its acquired Raymond Consumer Care products.

“At a consolidated level (organic), we expect to deliver mid-single digit volume growth, double-digit constant currency sales growth but low-single-digit sales decline in rupee terms due to GAUM and LATAM currency and hyperinflation accounting impact. Reported volume growth is likely at high-single-digit and reported sales growth to be flattish in rupee terms. We continue to drive y-o-y expansion in EBITDA (including forex) margin despite significantly higher category development investments,” the company stated in its quarterly update. 

International biz

International businesses for FMCG makers delivered mid-single to double-digit growth during the quarter.

Marico stated that its international business delivered mid-single-digit constant currency growth amidst transient macro headwinds in the Bangladesh market, while the other geographies held strong.

“With a degree of pricing corrections in key domestic portfolios, yet to anniversarise and significant currency depreciation in select overseas geographies, consolidated revenue declined in low single digits on a year-on-year basis,” the company stated.

Godrej Consumer stated that its Indonesia business continued to deliver double-digit volume growth and high-single-digit constant currency sales growth during the quarter.

“The GAUM (Godrej Africa, USA and Middle East) business had a flattish to mild decline in volume growth. This was driven by trade destocking in geographies that we plan to restructure in Q4. LATAM (Latin America) business revenue has been severely impacted on account of the sharp devaluation in Argentinian Peso from 361 to 808, which due to hyperinflation accounting has impacted nine months of revenue. This is likely to have a negative impact of mid-single digits on the consolidated sales. However, the impact on profit is minimal,” Godrej Consumer stated.

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