Mumbai
The FMCG industry witnessed growth in volume and expansion in gross margins in the June quarter aided by moderation in inflation which also boosted small players in select categories. Several small players, which had earlier vacated some of the market segments during the peak of inflation, returned back and intensified the competition at the local level, forcing several big FMCG players to go for price corrections.
Most of the listed FMCG entities reported volume-based growth in home care, personal care, beauty and foods products business, except the ice cream and beverages portfolio which was impacted by unseasonal rains in April and early May during the quarter.
As material inflation reduced from high single digits to low single digits, there has been an uptick in volumes in both urban and rural markets, indicating promising signs of recovery in demand and makers including HUL, ITC, Godrej Consumer, Dabur, Marico and Tata Consumer are increasing spends on advertising and promotions.
Moreover, FMCG players are now passing on the benefits of lower input costs to consumers, there is a sequential reduction in price growth. In anticipation of lower prices, FMCG companies are also now seeing trade reducing the stock levels by 1 to 3 days only, said one of the leading makers in its earning calls.
Tata Consumer Products Ltd (TCPL) reported a 29.67 percent rise in consolidated net profit to Rs 358.57 crore and its revenue from operations was up 12.45 percent to Rs 3,741.21 crore.
