The lure of FMCGs has faded over the years with the rise of consultancy firms, foreign banks and software companies, according to the Campus Recruiter Index, an annual survey by research agency AC Nielsen tracking students' perception of recruiting companies on campuses.
Most brokerages are betting that the new government will shift to a policy focussing on boosting rural incomes and consumption since that has clearly been a pain point.
With the rains at unprecedented low in August, kiranas are thinking twice before stocking up on goods. "With August 2023 rain shortfall at almost a 100-year low, we are seeing kiranas stocking up very carefully," Akshay D'Souza, chief of growth and insights at Bizom. He added, "As we look ahead, it does seem that the impact of rains in September will be critical to the sowing season.
Jiomart B2B is the latest among organised supply-chain companies to bite the bullet, shutting down its warehouses, and asking its employees to leave. Why are companies finding it difficult to sustain the supply-chain business? Experts point out that gross margins in supplying fast-moving consumer goods (FMCGs) are very low.
The fast-moving consumer goods (FMCG) sector has underperformed the Nifty over the past year as its 20 per cent return is trumped by 29 per cent of the benchmark index. The FMCG index saw a 2.2 per cent drop in the last session, while the Nifty lost 1 per cent. FMCG is seen as a defensive segment. The demand for staples like personal care products, groceries and snacks tend to be stable. FMCG companies are consistent dividend-payers.
The biggest bounce is in the realty sector, where the industry index jumped 80%. There's been a turnaround also in automobiles and ancillaries (up 45%). The pharma and health care indices have a welcome return of roughly 35%.
Most companies reporting an improvement in operating margins in Q1 as they cut ad spends and other expenses.
Normal monsoon makes FMCG, automobile and consumer durable companies optimistic about growth prospects
Anti-government protests in Egypt are making Prashant Goenka, director, international business, Emami Ltd, nervous
Chief Economic Advisor V Anantha Nageswaran on Thursday said the economy is expected to grow at 6.5 per cent in the current fiscal notwithstanding deficient rains in August. India recorded economic growth of 7.8 per cent in the April-June quarter of 2023-24 against 13.1 per cent in the year-ago period. India's economy in Q1 grew at the fastest pace in a year, on the shoulders of a boost in capital expenditure both at central and state levels, along with stronger consumption demand, especially in rural areas, and improved performance in the services sector, he said.
Demand for fast-moving consumer goods (FMCGs) went up last month across India, as kirana stores stocked up their shelves in anticipation of a sizzling summer, according to data by retail intelligence firm Bizom. There was a spike in beverages sales across the country despite inflation inching up in February after moderating downward previously, Bizom noted.
Only Hindustan Unilever and Nestl bucked the trend.
The sharp rise in flexible packaging prices, thanks to the crude oil spiral, has become a new headache for fast-moving consumer goods (FMCG) companies.
The FMCG sector has taken some steps to match the pace of growth in the organised retail sector. Companies have launched dedicated sales personnel for modern trade channels and taken initiatives to boost point of purchase management at the large stores. Modern trade refers to retailing through large-format stores whereas general trade refers to retailing through kirana stores.
Feeble demand in rural areas of the country has affected sales of fast-moving consumer goods (FMCG) in September as compared to August, which saw heavy stocking ahead of the festival season, according to the data of Bizom, a retail intelligence platform. Sales in rural India fell 14.3 per cent while urban sales growth stood at 1.1 per cent in September as compared to the previous month. Overall FMCG sales fell by 9.6 per cent in September as compared to August.
Of the 16 FMCG firms, 12 companies saw an increase in their respective foreign institutional investors holding in three months ended September 2013 over the year-ago period, while the remaining four witnessed a decline in FIIs stake, according to a report by A C Choksi Share Brokers.
Exact numbers are not known, but it's estimated that over the last 3-4 years the companies have increased hiring of sales staff from small towns and rural areas by over 20 per cent. In 2010, it will only rise.
As group CEO, Sudhanshu Vats' job is to steer the television (Colors, Nick, Sonic, MTV, etc) and film businesses of Viacom18 Media.
With the last two stimulus packages working wonders for the packaged goods industry, players in the sector are now rooting for one more round of fiscal incentives to further boost demand in the domestic rural markets and be competitive overseas.
FMCG product sales in the non-essential premium segment have grown at a rate of 25 per cent annually in the rural market during 2004-07, said a top official of a global consultancy company. The FMCG industry in the country is presently worth about 80,000 crore (Rs 800 billion), according to an estimate.
Companies like Dabur India, Colgate-Palmolive and Jyothy Labs, however, spent less than profits on these counts.
A total of 25,446 Chinese made electronic and Fast Moving Consumer Goods (FMCGs) were seized from the warehouse on Old Airport Road during the recent raids.
Mandates have been handed out to staffing solutions companies such as Randstad India and TeamLease, officials at these firms have said, as players increasingly push into rural areas to capitalise on the uptick in the hinterlands.
M&M was the top gainer in the Sensex pack, soaring around 7 per cent, followed by Bajaj Finserv, Bharti Airtel, PowerGrid, Infosys and ICICI Bank. On the other hand, HUL, Kotak Bank, Bajaj Finance and ITC were among the laggards.
In May, Satpal Singh, who runs a dairy business with three buffaloes in Jewar, near Noida, was worried about the steep spike in input costs. Singh said dry fodder rates, which cost Rs 1,500-2000 per tractor trolley last year, were quoting at Rs 4,500-5,000. The price of other cattle feed ingredients (that include mustard meal and similar mixes) had also gone up from Rs 2,000 per quintal to Rs 3,100-3,200 per quintal.
FMCG import bill is bloated, Modi must do something to bring it down.
A break-up of business shows that 75% of a firm's turnover is led by volume growth, while 25% is price-led. Companies such as Britannia, Nestl, Dabur, Marico, Kellogg, Parle Products, and Hindustan Unilever have increasingly focused on smaller packs of their key products, aimed at improving sales.
Management campuses are expecting the rise in pre-placement offers to ease the final placement process.
They are witnessing, or anticipating, a double-digit growth in job offers over the same period last year.
Much of the rural recovery story is based on the premise of agriculture doing well. Even if it clocks a growth of 2.5-3 per cent this year, it is still just around 15 per cent of the overall GDP. The non-farm sector, which constitutes a bigger portion of the overall rural economy, is now hampered by disruptions and lockdowns.
The issue of pollution caused due to the non-degradable material is keeping consumer goods majors - from ITC and Dabur to Nestl and PepsiCo - on their toes.
USAID looks forward to working with each to make financial inclusion a long-lasting and sustainable reality in India.
The near term will be challenging, as most will struggle to adapt to the new regime.
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