FMCG companies expect growth to slow in Q3

NEW DELHI: Hit by inflation, higher input costs and pricing measures, FMCG companies are expected to see a contraction in their gross margin and a modest-to-flat operating profit in the Dec quarter. Several FMCG makers are likely to log a low single-digit rise in their revenue, returning to the cycle of value-driven growth.
One of the reasons could be that a number of companies have opted for a price hike in the Dec quarter due to rising costs of inputs such as copra, vegetable oil, and palm oil. The price hikes came at a time when the urban market was dragged down by lowered consumption due to high food inflation. However, the rural market, which is slightly above one-third of the total FMCG market, stayed ahead of it.
Some listed FMCG companies, such as Dabur and Marico, shared their updates for the third quarter of FY25, and analysts expect either flat or low single-digit volume growth. Home-grown firm Dabur expects a "low single-digit growth" in the Dec quarter along with a "flattish operating profit" as it faced inflationary headwinds in some of the segments. agencies