Fast-moving consumer goods (FMCG) companies such as Godrej Consumer Products (GCPL), Marico and Adani Wilmar have given mixed indications of their financial performance in the June quarter. The three companies released their quarterly updates for the period on Wednesday.
While GCPL said that it saw a double-digit volume growth in its India business in the June quarter, led by a strong demand in home and personal care, Marico said that its consolidated revenue fell in the low-single digits percentage range. This was due to sluggish sales in rural markets and a move to cut prices of its Saffola edible oil brand. “Signs of improvement on a sequential basis were not clearly visible in the June quarter. The anticipated pickup in rural demand remained elusive,” Marico said in its quarterly update. Rural sales typically constitute over a third of FMCG sales in India. It is an important metric to gauge how consumers in the hinterlands are behaving and what are their purchase patterns.
Adani Wilmar, which makes branded edible oils, said that the June quarter sales declined by 15% due to a sharp fall in edible oil prices. This eclipsed strong demand for its food products, the company said on Wednesday. In contrast, GCPL said that consumer demand was steady in the June quarter, as inflation moderated during the period.“In India, the overall consumer demand remained steady as seen in the previous few quarters. Sales growth was marginally higher than mid-single digit as we passed on the benefits of lower input costs to our consumers,” GCPL said.
At a consolidated level (organic), GCPL expects to deliver high-single digit volume growth, teens growth in constant currency terms translating into close to double-digit sales growth in rupee terms. Sales growth (including inorganic) is likely to be in double digits, the company said.“Our quality of profits has seen sustained improvement, led by robust gross margin expansion and ongoing category development investments.
This should translate to strong Ebitda growth,” GCPL said in its quarterly update.Meanwhile, Marico said that sales volumes in its Parachute coconut oil business dropped, even as Saffola reported a double-digit growth, helped by price cuts that made its cooking oil nearly 30% cheaper from a year earlier.The company said it expected gross margins to expand “materially” and that the bottom line would grow in the double-digit percentage range on the back of reduced costs of various raw materials.