Consumer goods companies Marico and Godrej Consumer (GCPL) expect consolidated sales growth in the March quarter (Q4) to be in low-to-mid single digit, the two companies said in their quarterly updates on Friday.
While Marico maintained that demand sentiment was consistent in Q4 vis-a-vis the preceding quarters, GCPL said that operating conditions were subdued during the period.
On Thursday, peer Dabur India had pointed to sluggish FMCG demand in Q4, which would see it log mid-single digit revenue growth during the period, compared with a 7% rise in the December quarter and a 7.3% jump in the quarter before that.
Shares of Marico, GCPL and Dabur ended trade up 3.57%, 2.77% and 0.36%, respectively, on Friday.
Both Marico and GCPL said they expected an uptick in volume growth in Q4 in their respective India businesses, led by price cuts. Marico derives 75% of its consolidated revenue from domestic operations, while GCPL derives 56% of its consolidated revenue from India.
Marico also said it expected consolidated revenue growth to trend upwards in the quarters ahead, with domestic revenue growth outpacing volume growth in the future. It added that urban and rural consumption were largely converging, with key inputs such as copra prices inching up, even as edible oil and crude oil derivatives remained stable.
While Parachute Coconut Oil registered low single-digit volume growth in Q4, value-added hair oils had an optically weak quarter, Marico said, due to persistent sluggishness in the bottom of the pyramid.
Foods, it added, continued its steady run to close the year at 4x of its scale in FY20 and digital-first brands also sustained its strong growth trajectory.
GCPL said demand in household insecticides had been subdued in Q4 due to an extended winter in the north and east.
“Our GoodKnight Agarbatti launch was well received by consumers. Park Avenue and KamaSutra brands delivered in-line with category seasonality,” GCPL said.
Marico also indicated that its international business had reverted to clocking double-digit constant currency growth in Q4, led by Bangladesh bouncing back from transient headwinds and rest of the markets maintaining their positive momentum. The company also said it would maintain its investments in brand-building to strengthen its core and new franchises.
GCPL said its Indonesia business continued to deliver strong performance with double-digit volume growth and sales growth. The GAUM (Godrej Africa, US, and Middle East) organic business delivered high single-digit volume growth along with double-digit constant currency sales growth. And the East Africa reorganisation would result in a one-time impact of `70 crore on revenue.
“Against the backdrop of improving macro indicators, we expect a gradual uptick in the growth of our core categories through the ongoing initiatives to enhance the profitability. We will continue to aggressively diversify the portfolio through the accelerated scale up of Foods and Digital-first brands,” Marico said.