Sales of fast-moving consumer goods (FMCG) witnessed significant recovery in September after enduring a double-digit decline in August, according to data furnished by Bizom. Kirana stores in rural areas stocked up in preparation for the festival season, which began in September. This, combined with rainfall reaching 113 per cent of the long-perid average for the month, contributed to a boost in sales.
Stock market barometers Sensex and Nifty ended marginally higher on Monday as rise in wholesale inflation capped early gains despite a positive trend in global markets. The 30-share index settled 32.02 points or 0.05 per cent higher at 60,718.71 with half of its constituents ending in green. The broad based Nifty edged up 6.70 points or 0.04 per cent to close at 18,109.45.
The lowest FMCG index valuation has been around PE 27, while the highest have been above 42PE.
Expect fast-moving consumer goods makers (FMCG) to raise prices again next month owing to raw materials, transport, labour and packaging material costs remaining high or becoming even costlier. Whether it is packaged wheat flour and basmati rice or biscuits and shampoos, these products will become 2-10 per cent more expensive. Adani Wilmar will hike the price of its packaged wheat flour by 5-8 per cent and of its basmati rice by 8-10 per cent next month.
FMCG firms such as ITC, Parle Products, Marico, Emami, PepsiCo India and CG Corp Global on Wednesday assured uninterrupted supply of their products based on the learnings from the last year's lockdown, even as surge in COVID-19 cases in India forced Maharashtra to declare a 15-day curfew while other states also imposing various restrictions.
'We expect market consolidation and recommend buying during market dips.'
Today, the company has created a portfolio of vibrant world-class brands.
Sanjiv Puri, chairman and managing director of ITC, is looking to expand the conglomerate's play outside India by taking "strategic positions" in markets close to home in the non-cigarette fast-moving consumer goods (FMCG) and hospitality businesses. In a recent conversation with Business Standard, Puri revealed that ITC is setting sights beyond India's borders. "We already export to 100-odd countries. We want to scale that up and take some strategic positions in markets close to us," he said.
Most of the labourers in manufacturing plant are migrant workers. With them moving back to native places, there is going to be a huge challenge.
Fair trade regulator CCI on Tuesday said it has approved the demerger of the hotel business of diversified entity ITC Ltd into a separate entity. After the completion of the demerger, shares of ITC Hotels Ltd, a new entity, will be listed on the stock exchanges. The proposed combination relates to the demerger of the demerged undertaking to ITC's wholly-owned newly incorporated subsidiary, ITC Hotels.
FMCG major Britannia Industries' results for the January-March quarter (Q4) of the financial year 2023-24 (FY24) were received enthusiastically by the market with the share going up by 6.7 per cent on Monday to close at Rs 5,061.60 on the BSE. However, analysts said the results were in line with margins, and disappointing in terms of revenue growth. The consolidated net sales (excluding other operating income) rose 3 per cent year-on-year (Y-o-Y) to Rs 4,010 crore in Q4.
Among the Sensex firms, Tata Steel, JSW Steel, Tata Motors, Bajaj Finserv, Bajaj Finance, Asian Paints, ITC and Nestle were the major gainers. Mahindra & Mahindra, Reliance Industries, Axis Bank, ICICI Bank and Power Grid were among the laggards.
To double its current turnover of Rs 13.53 billion in five years, the firm plans to generate 25 per cent of this consolidated revenue from FMCG sales.
'We are confident that over the next few years the government will strike a fine balance between populist measures and growth, and manage coalition partners well.'
Among Sensex shares, Bajaj Finserve, ICICI Bank, Bharti Airtel, Bajaj Finance, Sun Pharma, Maruti Suzuki, ITC, and Nestle were the lead gainers. On the other hand, L&T Wipro, IndusInd Bank and TCS and Tata Motors were the lead losers.
Among the Sensex firms, ITC, Kotak Mahindra Bank, ICICI Bank, Nestle, Axis Bank, IndusInd Bank, UltraTech Cement, Bajaj Finance, Maruti and HDFC Bank were the major laggards.
Launched this April, the FCG business will end the year with a turnover of Rs 500 crore
Although large companies like Nestle, Dabur or HUL have been impacted by this slowdown in demand, it was the small, local players that have been hit harder.
Discount retailer DMart (Avenue Supermarts) hit its highest levels in a year and a half last week and is up over 11 per cent in the last one month. The company depends on low operating costs to offer the lowest prices to consumers, which enables sales velocity and scale, further reducing costs. This virtuous feedback loop has helped DMart gain market share in a sector dominated by unorganised stores.
Titan Company, Axis Bank, NTPC, Tata Motors, ITC, Tech Mahindra, Bajaj Finserv, ICICI Bank, HDFC Bank and Bajaj Finance were the other laggards. Bharti Airtel, Power Grid, Infosys and Larsen & Toubro were among the gainers.
CFO of Marico Industries Milind Sarwate believes that the FMCG sector has emerged out of the rut that it was in until a few years ago.
The first to see price hikes will be soaps. In the past six months, domestic palm oil prices have increased by 46 per cent. Palm oil is a key input going into soaps.
Beauty creams, hair oil, shampoos and other household items will cost more as FMCG firms plan to increase prices by up to 7 per cent due to the excise duty hike announced in the Budget.
Despite a handsome performance by leading fast moving consumer goods (FMCG) companies in the June quarter, the road ahead appears full of hurdles.
Hindustan Unilever, GlaxoSmithkline Consumer Healthcare, Godrej Consumer Products, Dabur, Nestle and other FMCG companies are lining up initiatives to maximise returns from modern trade channels including hypermarkets and supermarkets.
Equity benchmark index Sensex on Wednesday crashed over 900 points to sink below the 73,000 level due to widespread selling pressure amid a sharp fall in smallcap and midcap indices. Besides, deep losses in utility, energy and metal stocks and recent selling by foreign investors added to the gloom, analysts said. Benchmark indices started the session on a positive note, but the selling intensified during afternoon trade, with all sectoral indices ending in the red.
Fast-moving consumer goods (FMCG) companies can rejoice as the Rs 27,369 crore rural market in the country registered a growth rate of 17 per cent in the first 10 months this year.
Domestic customers will get access to high-quality Swiss products such as watches, chocolates, biscuits, and clocks at lower prices as India will phase out customs duties under its trade pact with the EFTA bloc on these goods over a period of time. India and the four-European nation bloc EFTA signed a trade and economic partnership agreement (TEPA) on Sunday to boost trade and investments between the two regions. The European Free Trade Association (EFTA) members are Iceland, Liechtenstein, Norway, and Switzerland.
Domestic customers will get access to high-quality Swiss products such as watches, chocolates, biscuits, and clocks at lower prices as India will phase out customs duties under its trade pact with the EFTA bloc on these goods over a period of time. India and the four-European nation bloc EFTA signed a trade and economic partnership agreement (TEPA) on Sunday to boost trade and investments between the two regions. The European Free Trade Association (EFTA) members are Iceland, Liechtenstein, Norway, and Switzerland.
The rise in excise duty will have a negative impact on FMCG companies, which FMCG companies will pass on to consumer.
The biggest headwind to the consumption story in FY23 is a sharp decline in government subsidies on food, fertiliser and fuel, and overall decline in revenue expenditure net of interest payments. This, analysts say, will adversely impact purchasing power of households at the lower end of the income pyramid, translating into lower spending on consumer goods and services.
'Today's engineering graduates have to learn the skills to solve problems which is actually a higher order skill.'
Even as banks and finance companies are reporting record-high earnings, their weighting in the benchmark National Stock Exchange Nifty50 Index has seen a downward trajectory. Investors expect a stronger performance from other sectors in the new year. Currently, banking, financial services and insurance (BFSI) companies collectively hold a weighting of 34.5 per cent, down from 36.7 per cent at the end of December 2022 and a record high of 40.6 per cent at the end of December 2019. This represents the sector's lowest weighting in the index since December 2021 when it stood at 33.7 per cent.
Companies from Nestle and ITC to Hindustan Unilever and Patanjali have pledged to reduce use of unhealthy ingredients by five to 50 per cent
FMCG sector will benefit from measures taken to negate food inflation pressure on common man and also measures to boost disposable income.
Lower income groups earning less than Rs 100,000 a year are yet to recover as are those earning between Rs 100,000 and Rs 200,000.
Dabur India has been the worst performer in the fast-moving consumer goods (FMCG) space this year (CY23), posting a 1 per cent decline even as its peer index, the Nifty FMCG, has delivered returns of over 29 per cent in this period.
Among Sensex shares, HCLTech, Asian Paints, Maruti, JSW Steel, TCS, SBI, ITC and Bharti Airtel were the major losers. On the other hand, Bajaj Finserv, Mahindra & Mahindra, Titan, L&T and Wipro were the major gainers.
Talks on with P&G, HUL, Patanjali, among others to push their products via 250,000 common centres
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