Aug 24, 1999|
FMCG juggernaut slowing down?
A study of top 8 FMCG companies in India (excluding Hindustan Lever) reveals that the FMCG sector faced a difficult time in FY99.
Total sales of these companies increased by 14%, as compared to a growth of 17% in FY98. Net profit growth declined by more than half to 12% in FY99, compared to growth of over 25% in FY98.
When Hindustan Lever's (HLL) figures were added to the tally, then sales growth shot up to 19% in FY99 compared to 17% in FY98. Net profit growth
stood at 29% compared to 32% in FY98. But HLL's figures are not comparable as it has acquired several companies over the past three years and a comparison with its figures will not give an accurate view of consumer sentiment.
The figures suggest that the FMCG juggernaut is slowly coming to a halt. The companies' average realisations have gone down drastically as a
result of increased competition and economic slowdown. The slow down led to reduced consumer spending and forced companies to offer discounts and other freebies.
The picture has not been very encouraging in the first half of the current year for December ending companies (excluding HLL). Net profits
increased by 28% during this period as against 57% growth during the corresponding period of the previous year. Sales growth was flat as compared to a growth of 21% last year. In the face of falling demand, better-cost controls and efficient working capital management have enabled these companies
improve their margins on a flat sales growth.
The 'big daddy' of them all - HLL has not been spared either. Sales for the FMCG major grew by only 11% in the first half of the current year
as compared to 20% in 1HFY99. However, HLL's profits grew at a healthy 34% (28% in 1HFY99) aided by robust rural demand and removal of excise duty on packet tea.
More Views on News
Aug 9, 2017
While GST implementation brought down volumes and profitability in the short run, Marico remains optimistic in the long run.
Dec 9, 2016
Procter & Gamble Hygiene and Health Care has announced the first quarter results of the financial year ended June 2017 (1QFY17). The company's sales rose by 12.5%YoY while net profit rose by 50.1% YoY during the quarter.
Nov 30, 2016
Nestle India declared results for the quarter ended September 2016. Here is our analysis of the result.
Nov 30, 2016
GSK Consumer Healthcare declared results for the quarter ended September 2016. The revenues dropped by 1.3% during the quarter as compared to a year ago; while the profits declined by 16.6% YoY during the quarter.
Nov 28, 2016
Marico has reported a flat topline while the bottomline has grown by 18% YoY during the quarter.
More Views on News
Aug 17, 2017
A small-cap Indian company with high-return potential and blue-chip-like stability is set to supplant the Chinese players in this niche segment.
Aug 21, 2017
Most Indians who cannot find jobs, look at becoming self-employed.
Aug 16, 2017
The IT Sector could be in an uptrend till February 2019. Are you prepared to ride the trend?
Aug 22, 2017
Post demonetisation, a cut in bank savings deposits rates was in the offing.
Aug 16, 2017
Ensure your financial Independence, and pledge to start the journey towards financial freedom today!
Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement. LEGAL DISCLAIMER:
Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here
. The performance data quoted represents past performance and does not guarantee future results.SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.
Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: email@example.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407