FMCG firms sight consumption rise

Double-digit growth in HUL rural sales

Revival of consumer sentiments, combined with festive season consumption, helped FMCG companies post impressive growth in revenues, volumes as well as profits in the third quarter. Health and hygiene products, food and refreshments and rural consumption supported the performance of fast moving consumer goods firms.

Hindustan Unilever's total sales grew by 20 per cent in the December quarter, while its domestic consumer business grew by 7 per cent. Sales volumes, excluding acquisition of GSK, grew 4 per cent. Health, hygiene and nutrition, which form 80 per cent of HUL's portfolio, grew in double digits. Foods and refreshments were up by 19 per cent. Rural market, which grew in double digits, also supported sales.

HUL's profit after tax for the quarter went up 19 per cent to Rs 1,921 crore against Rs 1,616 crore in the year-ago quarter. As the commodity prices had gone up, HUL made doubledigit price hike in tea and a 2.5 per cent increase in skin cleansing products during the quarter.

"With Covid cases coming down sharply and increasing mobility, economic activity in the country continues to improve. The rapid rollout of vaccines will give further impetus to economic growth," said Sanjiv Mehta, chairman and MD of HUL.

"Good recovery in laggard parts, 80 per cent of portfolio grew in double digits, Minimal margin compression, strong brand investments continue, which is the right strategy in our view," finds Edelweiss. Securities.

Emami reported 36.6 per cent jump in its standalone net profit at Rs 202.17 crore for the third quarter as revenue from operations surged by 13 per cent to Rs

845.37 crore. The company posted a strong growth of

16 per cent in its domestic business led by 13 per cent growth in volumes.

"We are witnessing a consistent and all-round growth coming from all channels over the last two quarters and expect to continue with this growth trajectory. Most of our brands, including power brands and digital-first brands in the healthcare segment are on their growth path," said Harsha V. Agarwal, director, Emami.

While rural markets continued to perform better, growth in urban markets also picked up. E-commerce grew by 3.5x and modern trade registered growth of 51 per cent during the quarter for Emami.

Marico reported a 13.04 per cent rise in consolidated net profit for the third quarter while revenue from operations went up by 16.33 per cent. Revenue from operations grew on the back of a strong domestic volume growth of 15 per cent. Marico saw robust demand for more than 95 per cent of its portfolio amidst steadily improving consumer confidence.

Jyothy Labs reported an

18.23 per cent rise in consolidated net profit. Revenue from operations of the company was up

13.26 per cent. According to Jyothy Labs, revival of the consumer sentiment reflected in the company's performance across its brand portfolio.

"The performance of FMCG companies have improved sequentially along with volume growth. Discretionary spends are also recovering. We should expect better performance in the coming quarters,' said Kaustubh Pawaskar, AVP, fundamental research at Sharekhan.