Some of the country’s top consumer goods companies, which have reported their second quarter numbers so far, believe the second half of the ongoing financial year will be stronger than the first, driven by better demand conditions.
The GST-related trade disruptions that had hurt financial performance in the September quarter will abate, top executives said, with volume growth likely to improve on GST-induced price cuts and income tax cuts.
The aggregate financial numbers derived after combining the earnings of eight top FMCG firms, which have declared their results, show that year-on-year revenue growth and profit growth for Q2 are at 1.7% and 1.1% only. While Ebitda growth has been flat, Ebitda margins have been range-bound at 24% in the quarter versus 24.5% seen last year.
FMCG firms that have declared their Q2 numbers include Hindustan Unilever (HUL), Nestle India, Godrej Consumer (GCPL), Dabur, ITC, Colgate-Palmolive, Varun Beverages and Gillette India. Britannia, Tata Consumer, Emami, Marico and Procter & Gamble Hygiene and Healthcare are yet to declare their results.
“We anticipate normal trading conditions starting early November, once prices stabilise. This will pave the way for a gradual and sustained market recovery. Our focus will remain on volume-led growth,” Priya Nair, CEO & MD, HUL, said.
Sudhir Sitapati, MD & CEO, GCPL, said he expected his company’s performance to strengthen sequentially through FY26. “Demand trends are improving, and we remain confident of achieving high single-digit underlying volume growth (UVG) in our standalone business and high single-digit revenue growth at a consolidated level,” he said.
Cigarettes-to-FMCG major ITC sees a stronger second half, driven by favourable macro-economic conditions and GST cuts.
Manish Tiwary, chairman & MD, Nestle India, said the company would invest in growth by accelerating its spends on brands and manufacturing capacity. “We will remain fast, focused and flexible, bringing forth innovations that are bolder, bigger and better,” he said.
Some firms, notably, in beverages, such as Dabur and Varun Beverages, pointed to extended rainfall hurting demand in Q2. While companies remain optimistic about the third quarter, unseasonal rains continue to hit parts of the country, including the west, south and east.
“Rains in many parts of India and transitional GST headwinds did pose operational challenges. However, we delivered a resilient performance, with 95% of the portfolio showing market share gains. We see the trend improving in the second half,” Mohit Malhotra, CEO, Dabur India, said.
Firms are also planning for the future, with Varun Beverages, for instance, amending its memorandum of association (MoA) and tying up with Carlsberg for distribution of beer in select geographies in Africa.
Dabur’s board has approved the launch of Dabur Ventures, an investment platform with a capital allocation of up to `500 crore, which will be invested in acquiring stakes in high-potential, new-age digital-first businesses.
GCPL on Friday said that it was acquiring male grooming brand Muuchstac for `449 crore in its quest for high-demand and high-margin FMCG categories.