InvestorQ : How did the numbers of the top FMCG companies like Hindustan Unilever, Dabur, Marico and Britannia pan out in the quarter?
vaishnavi mhatre made post

How did the numbers of the top FMCG companies like Hindustan Unilever, Dabur, Marico and Britannia pan out in the quarter?

vidhya Laxmi answered.
3 months ago

For the December quarter, there was a perceptible shift in the performance of FMCG companies and that goes a lot beyond numbers and profits. The quarter also gave an idea of how the in-home consumption of Indians has shifted in the last few months even as the economy opened up and consumers purchased beyond just essential goods.

One trend was that in the Dec-20 quarter, the hoarding reduced considerably as people reported moderation in growth of packaged biscuits, flour and sanitizers. The customers had over the short term fear of availability. Even the sharp spike in demand for staples and convenience foods seen in the Jun-20 and Sep-20 quarters tended to taper in the Dec-20 quarter. People also broadened their purchases.

If you take ITC as a microcosm of the FMCG space, then its Savlon range of health and hygiene products sustained high growth in the Dec-20 quarter. Even as the pace slackened in the Savlon line for ITC, products like the Aashirvaad flour and Sunfeast biscuits also moderated substantially in terms of demand pick-up. However, ITC’s YiPPee noodles and Bingo! Snacks reported strong traction in numbers in the Dec-20 quarter.

Marico’s Saffola cooking oil and oats reported strong growth during the December quarter. At the same time, Britannia reported 6% growth in Dec-20 revenues, substantially lower than the Sep-20 quarter revenue growth of 26%. Unlike other FMCG companies, Britannia has been more successful in sustaining its margins in its product segments due to its predominant focus only on the premium segments.

Dabur India had an interesting take on the sanitizer category which it observed had become largely commoditized and hence the growth momentum of this product category had been lost. Even Marico had a similar experience. In fact, Marico is planning to gradually withdraw its proposed future investments in this particular segment and defocus from this segment and get back to its core area as the hygiene story appeared to have played out adequately.

Godrej Consumer Products or GCPL had rolled out 10 new products in the hygiene and home cleaning segment expects that while hygiene broadly could saturate, the demand for cleaning products would sustain. Godrej continues to invest its time and management bandwidth in the hygiene sectors with specific focus areas. Godrej also noted that consumers were back to buying more discretionary items and personal care products.

Hindustan Unilever saw 9.7% growth in its beauty and personal care segment in terms of top line revenues. Within the hygiene space, HUL reported that personal wash category had continued to grow at around 12%. HUL also observed that the discretionary and out-of-home consumption products had seen a smart recovery in the last few months.