Column: Fast moving FMCG

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: The Rs 86,000-crore Indian FMCG industry is on a roll. Compared to other corporate sectors in India, the FMCG industry has performed well in Q2 FY10.While many Indian corporates have reported heavy losses, major FMCG companies have posted a double digit growth in Q2 FY10. As a result, the industry has registered a 12% volume growth in Q2 despite the economic downturn and poor monsoon.

Backed by the softening of commodity prices, benefits of lower excise and on the back of a low base, the industry has registered a healthy growth in Q2. In fact, the industry is expected to register a double-digit growth in the next two quarters of this fiscal.

Sample this: FMCG major Dabur India has posted a 30.7% increase in its consolidated net profit for the second quarter ended September at Rs 140.3 crore, as compared to Rs 107.4 crore in the year-ago period on the back of strong volume growth across key categories.

While Tata Tea Ltd has reported a 32% increase in its consolidated net profit at Rs 287.44 crore for the second quarter ended September 30, 2009, Marico Ltd’s total income has increased from Rs 495.21 crore for the quarter ended September 30, 2008, to Rs 519.29 crore for the quarter ended September 30, 2009.

Likewise, other FMCG companies such as Godrej Consumer Products Ltd, Emami, Britannia Industries and Colgate Palmolive India have posted double-digit growth in Q2 FY10.

Industry captains in the FMCG sector are optimistic about the sector’s performance in Q3 FY10. “I think the Indian FMCG industry is doing pretty well. Many companies have posted healthy growth in the second quarter of this fiscal,” said Adi Godrej, chairman of the Godrej group.

Just what fuels the growth of this sector even during tough times? The logic is fairly simple. Consumers can do away with luxury items to tide over the economic downturn. But they vitally need their soaps and soups to lead a normal life.

Recession or no recession, consumers want to eat and live well. Hence, FMCG products will always be in demand.