ITV

Tag: demand

  • Inflation bites FMCG consumption, demand remains low

    Inflation bites FMCG consumption, demand remains low

    Mumbai: The major players in the FMCG sector, Marico and Godrej Consumer Products Ltd, hint that inflation continued to ‘hit hard’ FMCG industry and demand remained soft in the June quarter.

    According to Marico, current trends indicate that consumers “titrated consumption” in some non-essential categories and either “downtraded among brands or switched to smaller packs” in the essential categories.

    In its quarterly update for Q1 FY23 Marico said, “In the given context, India business volumes declined in 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.”

    Marico said it maintains its aspiration of “delivering sustainable and profitable volume-led growth over the medium term”.

    According to Godrej Consumer Products Ltd (GCPL), the country’s FMCG industry continued to be “hit hard by inflation levels” leading to successive price hikes as well as impacting volumes during the three months ended June.

    A recent update revealed that in the first quarter of the current fiscal, the leading FMCG player said that the rural markets witnessed slower growth compared to urban markets during the period.

    GCPL expects to deliver early double-digit sales growth on a high base in India and the growth will be mostly “price-driven”. The company would have “mid-single-digit volumes drop on a high base, with a three-year volume compound annual growth rate (CAGR) close to mid-single digits,” in the domestic market.

    “The Indian FMCG industry continued to remain soft during the quarter. It continued to be hit hard by inflation levels aggravating due to geopolitical tensions, leading to successive price increases and impacting volumes,” GCPL said.

    Inflation impacts markets worldwide

    In recent months, inflation has been on the rise in most markets worldwide.

    Among the international markets, GCPL said that Indonesia, which is the company’s second-largest market after India, also faced an impact on consumption and margins.

    “In Indonesia, with hygiene performance waning after COVID-19 and a large hygiene comparator in base, we expect a high single-digit sales decline. The sales performance excluding hygiene was largely flat,” it said.

    GCPL said that it is putting building blocks in place to drive category development and general trade distribution to ensure gradual recovery in the medium term.

    “In Godrej Africa, USA, and the Middle East, we continued our growth momentum across most of our key countries of operations. We expect to deliver double-digit sales growth, with a continued focus on driving sustainable, profitable sales growth,” it said.

    Further, it expects constant currency sales growth in the high teens in Latin America business.

    “At a consolidated level, we continue to leverage our category and geographic portfolio. We expect to deliver high single-digit sales growth and a three-year CAGR in double-digits,” the company said.

    With respect to profitability in the June quarter, GCPL expects lower year-on-year EBITDA (Earnings Before Interest Tax Depreciation and Amortisation) margins.

    “This is due to input inflation, upfront marketing investments to drive category development and weak performance in Indonesia,” GCPL said.

    On the other hand, Marico’s international business maintained “strong momentum, delivering high-teen constant currency growth.” It experienced growth in all markets and managed to remain on the path of sustained profitable growth.

    The company expects “consolidated revenue in the quarter ended marginally higher on a year-on-year basis.”

    Dabur’s international business is expected to register a “high single-digit revenue growth” during the April-June quarter in constant currency.

    “Overall, the consolidated revenue is expected to grow in the mid to high single digits. We continue to grow ahead of category growths and gain market share in most of our segments,” Dabur said.

    Mixed performance in the domestic market

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

    “Personal care sustained its strong double-digit growth trajectory with a two-year CAGR also in double-digits, led by both personal wash and hair colours. Home care witnessed a low single-digit sales drop on a high base. However, the two-year CAGR remained at a high single-digit figure,” it said.

  • Demand remains stable for Godrej Consumer Products in Q3

    Demand remains stable for Godrej Consumer Products in Q3

    NEW DELHI: Godrej Consumer Products has reported that demand trends in key categories  remained stable in the quarter ended 31 December 2020.

    In India, the company expects to deliver a second consecutive quarter of close to low double-digit sales growth, driven by higher than mid-single digit volume growth. This is led by soaps, which is expected to deliver strong mid-teen growth. Following a sharp recovery, hair colours is also expected to deliver mid-teen growth. Household insecticides seem likely to deliver close to high single-digit growth.

    “We continue the robust scale up of our personal and home hygiene category,” the consumer goods maker said in a statement.

    Indonesia is expected to register a very marginal decline in constant currency sales. This is impacted by challenging macroeconomic variables, a gradual recovery in the air fresheners category, and high competitive intensity in the wet wipes category.

    In Africa, USA, and the Middle East, growth momentum continued and the company may deliver high teen constant currency sales growth, a second consecutive quarter of double digit sales growth.

    It expects sales growth in Latin America business to remain strong in constant currency terms. Godrej’s SAARC business has also continued to deliver healthy sales growth.

    “At a consolidated level, we continue to leverage our category and geographic portfolio well, and expect to deliver a second consecutive quarter of close to low double-digit sales growth,” the company added.

  • NDTV issues statement on tax demand of Rs 4.3 bn

    MUMBAI: NDTV has issued a statement on the immediate tax demand of Rs 4.3 billion.

    It stated on its web site: “The attempt to intimidate and paralyze NDTV has expanded to epic proportions in the last 24 hours. There are new attacks from the CBI and the Enforcement Directorate. In short, there is a three-pronged attack on NDTV by the:

    1) CBI
    2) Enforcement Directorate
    3) Income Tax Department”

    “All three agencies are attacking NDTV over one transaction in which GE, USA, made a US$ 150 million investment in NDTV – a perfectly legitimate and publicly, officially declared investment – which they are calling a “sham transaction,” it stated.

    “Especially shocking is a demand of Rs. 4.3 billion from the Income Tax Department. The Income Tax Department’s letter, (sent today — 27 July), says NDTV has to pay the amount “immediately now” (sic!). A demand for immediate payment without any notice period is unheard of and smacks of sinister motives by the IT Department,” it added.

    NDTV says:

    “The IT department has not even completed the assessment of NDTV as directed by the Income Tax Appellate Tribunal (ITAT).

    The ITAT had told the IT Department to make a fresh assessment on no less than four issues. These instructions have been flat-out ignored by the IT Department in rushing its tax demand to NDTV.

    It is unknown in law to make this sort of “partial tax demand” without completing the entire tax assessment.

    Income Tax law only recognises one assessment order – and the IT Department must complete the assessment including the four new factors raised by the ITAT.

    After the ITAT order (based on incorrect facts given by the IT Department), NDTV has, by law, 120 days to appeal. It is shocking that even before the appeal can be filed, the tax department has shown such alacrity in demanding the tax. This is the same Tax Department which dragged its feet for three years, seeking more than 20 adjournments in the ITAT.

    The new urgency reflects instructions to punish NDTV and to issue a warning to the media at large of the consequences of balanced journalism.

    In an undisguised fishing expedition, the CBI has sent NDTV a letter demanding documents from NDTV and its subsidiaries for an unspecified period – this despite NDTV having supplied more than 500 pages of documents only two weeks ago. Strangely, the CBI does not acknowledge the receipt of these documents.

    Separately, the Enforcement Directorate informed the Bombay High Court yesterday that it is investigating NDTV for violations under PMLA (Prevention of Money Laundering Act) – it has never, of course, informed NDTV of any such charge. The ED has already spent a good part of the year summoning NDTV management and questioning them repeatedly, without informing the company of what it has done wrong.

    The government is making clear the implications of fearless journalism. Despite the illegal and massive pressure, NDTV will not allow its coverage to be affected by these shameful tactics.”

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