Rural demand to support FMCG growth
New Delhi, July 7: Fastmoving consumer goods companies expect growth along with expansion in margins during the AprilJune quarter of this fiscal, helped by a revival in rural demand and a stable urban market.
Listed FMCG companies such as Dabur, Marico and Adani Wilmar in their latest quarterly updates have reported a “gradual improvement” in demand trends in the April-June quarter, which was on the expected lines.
Home-grown FMCG maker Dabur expects to register mid to high single-digit growth in its consolidated revenue, supported by mid-single-digit volume growth in the domestic market.
Marico said its consolidated revenue grew in high single digits in the June quarter, while the domestic business posted a “modest uptick in underlying volume growth” on a sequential basis.
Adani Wilmar has also reported an overall 13 per cent volume growth in the June quarter.
Its food and FMCG business volumes grew by 23 per cent year-on-year, said Adani Wilmar.
About margins, the makers expect expansion on a year-on-year basis helped by factors such as benign commodity prices and cost-saving initiatives.
“Commodity prices were stable during the quarter,” said Dabur, adding, “Gross margins are likely to witness some expansion on account of rollover price increases and cost-saving initiatives.”
Marico among others, also expects gross margin to expand on a year-onyear basis.
Among key inputs, copra prices stayed firm in line with forecasts, while edible oil and crude oil derivatives remained rangebound.
“Operating profit is expected to grow slightly ahead of revenue leading to a marginal inching up of operating margin on a year-on-year basis,” it said.
About rural market sales, Dabur said in the June quarter Dabur saw sequential improvement in demand trends with growth picking up from those regions.