How have major FMCGs fared in Q1 amid macro economic challenges?

Major players showed resilient performances despite muted consumer demand amid rising inflation.

Mumbai: The country's FMCG industry demonstrated resilience during the first quarter of the current fiscal, as indicated by the revenue reports of leading FMCG players, even as the sector continued to witness macro-economic challenges and inflationary winds. However, in the quarterly updates for the period, major players such as HUL, Marico, and Godrej Consumer Products (GCPL) demonstrated the effects of muted consumer demand, leading to successive price hikes as well as an impact on volumes.

Homegrown FMCG major Dabur India reported a flat consolidated net profit of Rs 440 crore year-on-year in the quarter ended 30 June 2022. The company had posted a net profit of Rs 437 crore in the year-ago period. Growth in revenue was aided by robust 180 per cent YoY growth in its retails business and a strong double digit growth in its food and other businesses.

Dabur India Q1 Results: Consolidated profit rises 50 per cent QoQ as revenue grows 12 per cent

"Dabur continued to demonstrate agility and resilience to deliver steady revenue growth despite consumer sentiments dwindling in the face of significant and increasing inflationary headwinds," the company said in a regulatory filing.

Food business revenue increased by 69 per cent, while other and retail business revenues increased by 37 and 15 per cent, respectively.

Growth in its mainstay consumer care business, however, remained flat both on a year-over-year and sequential basis. The business continues to contribute the lion's share of revenue, accounting for 75.7 per cent of total revenue. The company's revenue share, however, has declined from 83 per cent last year as well as in the previous quarter.

The food business improved its revenue share to 21.6 per cent from 15.4 per cent last year and 14.3 per cent during the previous quarter. 

Demand in the FMCG industry remained soft in the June quarter, with current trends indicating that consumers ''titrated consumption'' in some non-essential categories and either "downgraded among brands or switched to smaller packs" in the essential categories, as unprecedented inflation continued to impact the share of their income available for spending on consumer staples.

Here’s how some of the other leading FMCGs fared in the quarter ended June:

Godrej Consumer Q1 Results: Consolidated net profit fell 16.56 per cent while revenue increased by eight per cent.

FMCG major Godrej Consumer Products Ltd (GCPL) reported a 16.56 per cent decline in its consolidated net profit at Rs 345.12 crore for the first quarter ended 30 June 2022, on account of commodity inflation and upfront marketing investments.

The revenue from the sale of products of the Godrej group’s FMCG arm was up 8.08 per cent at Rs 3,094.31 crore during the quarter under review, as against Rs 2,862.83 crore in the corresponding period last fiscal.

In the domestic market, GCPL witnessed a mixed performance in its personal care and home care categories.

Hindustan Unilever Q1 Results: Net profit increased by 11 per cent to Rs 2,289 crore.

FMCG major Hindustan Unilever reported a 11 per cent jump in net profit at Rs 2,289 crore for the quarter ending 30 June 2022, as against Rs 2,061 crore in the year-ago period. The company's total income rose 20 per cent to Rs 14,409 crore in Q1FY23 as against Rs 11,982 crore in Q1FY22.

HUL’S home care segment delivered 30 per cent growth, driven by strong performance in fabric wash and household care, with both categories growing in the high double-digits in the first quarter of this fiscal.

ITC Q1 Results: Net profit increased by 34 per cent in the first quarter, exceeding expectations.

Diversified conglomerate ITC Limited on Monday reported a year-on-year consolidated net profit of  Rs 4,389.76 crore, up 33.97 per cent for the April-June quarter (Q1FY23). It reported a consolidated net profit of Rs 3,276.48 crore in the year-ago period.

Total revenue from operations of the FMCG major increased by 39 per cent to Rs 19,831.27 crore from Rs 14,240.76 crore during the corresponding period a year ago.

Among segments, FMCG revenue stood at Rs 4,451 crore as compared to Rs 3,725 crore, up 19.5 per cent YoY. The revenue from hotels came in at Rs 554 crore, compared with Rs 128 crore, up 332.8 per cent YoY. The revenue from the paper segment came in at Rs 2,267 crore against Rs 1,583 crore, up 43.2 per cent YoY.

Marico Q1 Results: Marico reports a decline in Q1 volume in the domestic market.

FMCG major Marico reported a volume decline in its India business.

''In the given context, India's business volumes declined in the mid-single digits. The performance was particularly dragged by a sharp drop in Saffola Oils. Excluding Saffola Oils, the India business posted marginal volume growth. Parachute Coconut Oil recorded a minor volume decline,'' said Marico in its quarterly update for Q1 FY23.

However, premium discretionary categories fared relatively better in the April-June quarter because of a lower base and lower consumption dip in the upper-income consumer segment.

Adani Wilmar Q1 Results: Due to strong revenue growth, Q1 net profit is up 10 per cent to Rs 194 crore.

Meanwhile, edible oil major Adani Wilmar (AWL) recorded strong growth in volume and revenues in Q1 of FY2023, on the back of strong performance by its FMCG and food businesses.

Adani Wilmar registered a 10.18 per cent rise in net profit to Rs 193.59 crore in the quarter ending 30 June 2022 (Q1FY23), compared to the profit of Rs 175.70 crore witnessed in the same period last year.

Food and FMCG revenue for the company stood at Rs 860 crore in the quarter under review, registering a growth of 66 per cent YoY. Edible oil business revenue was up 23 per cent YoY to Rs 11,519 crore, and industry essentials revenue increased 67 per cent YoY to Rs 2,353 crore, led by castor oil exports and oleo business.

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