FMCG cos expect inflation to hit volume growth in Q3

Hit by inflation, higher input costs and pricing measures, fast-moving consumer goods companies are expected to see a contraction in their gross margin and a modest-to-flat operating profit in the October-December quarter.

- Press Trust of India [e-mail]

NEW DELHI:

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 December quarter due to rising costs of input items 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 of the 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.