Marico sees FMCG demand revival during September quarter – Times of India

MUMBAI: In what signals an uptick for the FMCG sector, Marico has talked about a partial revival of consumer sentiment in an update for the September quarter. The note, which is an overall summary of the operating performance and demand trends witnessed in the September quarter, said the revival of consumer sentiment is also reflected in the company’s performance across portfolio and channels.
Marico said the rural market continued to perform better than urban aided by the government’s relief packages and the consumption shift due to reverse migration of labour. A strong indicator of a turnaround is that the company has upped investments behind brand-building and advertising spends are back to pre-Covid levels.
“India business witnessed signs of revival in consumer demand in the core categories contributing more than 90% of the business and registered robust volume growth in the quarter. Parachute reaffirmed its strong brand equity and clocked growth ahead of medium-term aspirations. Saffola edible oils continued its stellar run and delivered strong volume growth in line with past few quarters. Value-added hair oils showed resilience and returned on a growth trajectory in the quarter from a sharp decline in Q1,” said Marico.
Abneesh Roy, research analyst at Edelweiss Securities, expects an uptick in growth for most of the FMCG companies in the second quarter the second quarter of the current fiscal. “In Q1, because of the lockdown there was severe impact on distribution. Some of these issues are now resolved. Categories like sanitisers and foods continue to see very strong demand. Even in discretionary categories like skincare, cosmetics and ice-cream, there is a quarter-on-quarter (QoQ) improvement. Some of these discretionary categories will see a year-on-year dip,” said Roy.
Marico said while traditional trade and e-commerce continued to drive growth, modern trade fell behind, although it did improve sequentially. “CSD (sales at Canteen Stores Department) continued to witness a steep decline,” said Marico.