Rising costs, muted demand to weigh on FMCG margins in Q1
Live Events
(You can now subscribe to our
(You can now subscribe to our ETMarkets WhatsApp channel
ET Intelligence Group: Select companies in the fast moving consumer goods (FMCG) sector are expected to show marginal pickup in sales volume for the June quarter. Revenue growth will likely be driven by higher prices for some firms while others may report pressure due to weak demand. Margins may contract due to higher material costs and increased advertising spend for some companies. Marico and Tata Consumer Products are top picks of most analysts.The sector major, Hindustan Unilever 's volume growth is expected to revive to 3% for the June 2025 quarter given gradual recovery in demand. After clocking a 4% improvement in the year-ago quarter, volume growth fell in each of the following quarters to 2% in the March 2025 quarter. Operating profit may remain flat while margins are likely to contract by 1% due to rise in advertising and promotion costs to boost volumes.The cigarettes-to-paperboards maker, ITC is expected to sustain the year-on-year cigarette volume growth at the March quarter level of 5%. Paperboard growth is expected to remain weak due to sluggish export markets, weaker realisations and cheap Chinese supplies. Margins are expected to decline in both the categories due to surge in raw material costs. On the other hand, agri-business growth is expected to be in double-digit at around 10%. Nestle India is likely to deliver a 6% year-on-year growth in revenue, supported by about 6.5-7% rise in sales volume and price increase. However, inflation in coffee, cocoa, milk and edible oils could add pressure on the margin front. Varun Beverages (VBL), a major bottler of PepsiCo, may report flat revenue due to decline in volumes amid early onset of the monsoon season. According to Motilal Oswal Financial Services (MOFSL), the operating margin before depreciation and amortisation (Ebitda margin) may contract by 150 basis points. Britannia Industries is likely to clock volume growth of 3-4% while price increase implemented in the June 2025 quarter may drive revenue up by 9%. High agricultural commodity costs are likely to weigh on margins, though profit may rise by around 9% due to higher product prices.Revenue of Tata Consumer Products is expected to rise 11%, supported by growth in the domestic tea business. Salt segment is also expected to be driven by higher volumes and price increase. Marico's revenue may jump around 22% driven by 8-9% volume growth in the domestic market and higher product prices. On the contrary, margins are expected to contract by 330 bps points due to copra inflation and higher base.FMCG stocks outperformed the frontline indices in the past month where the Nifty FMCG index jumped 3.6% compared with around 1% rise in the benchmark Nifty 50 and BSE Sensex indices.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Mint
20 minutes ago
- Mint
Global oversight needed for the tokenization of currency: Nirmala Sitharaman
Finance minister Nirmala Sitharaman on Saturday called for a redefinition of multilateral institutions to provide effective oversight as countries explore the tokenization of currency, warning of rising complexity and the lack of global frameworks to govern this shift. Speaking at the release of a book, A World in Flux: India's Economic Priorities, in New Delhi, she said that multilateral institutions have never been left in limbo in the last 100 years. The finance minister said this is true for financial as well as strategic institutions. Every multilateral institution that has successfully served earlier is now wondering where it is, what its immediate future will be, and how it will redefine itself. Her concerns about the tokenization of currency—the transformation of money into digital tokens on a blockchain or distributed ledger—come at a time when cryptocurrencies are increasingly making their way into the financial world. The Reserve Bank of India has cautioned multiple times that virtual currencies are risky. However, the US government under President Donald Trump is encouraging more innovation in this area. In January, Trump signed an executive order to ensure Washington's leadership in digital financial technology. He then set up a working group to develop a federal regulatory framework governing digital assets, including stablecoins, and to evaluate the creation of a strategic national digital assets stockpile. Trump also revoked the Treasury Department's 'Framework for International Engagement on Digital Assets, which suppressed innovation and undermined US economic liberty and global leadership in digital finance'. The US is also trying to become the 'crypto capital of the planet', according to the presidential order. Sitharaman said multilateral institutions have to be redefined. 'If you could go for a currency with no gold backing sometime in the 70s, now it is already moving towards tokenization and is that something on which we see the depth of?' The minister also asked if there was any framework under which any country could unilaterally take that route. 'Who is going to have oversight on these sorts of things?' The minister said the depth and the complexity of the situation were increasing. The book, A World in Flux: India's Economic Priorities, edited by Amita Batra, former chairperson at the Centre for South Asian Studies and A.K. Bhattacharya, editorial director at Business Standard is published by Rupa Publications India Pvt. Ltd. Sitharaman also said in response to a question about the normalization of economic ties with China that it was right to point out that there are calls for greater access and interaction with China, and possibly to open some windows. 'That is not just from our side, even the Chinese have been approaching through the ministry of external affairs,' the minister said, referring to external affairs minister S. Jaishankar's recent visit to China. 'There is some kind of beginning. As to how far it will go, it is something we will have to wait and see,' the minister said, adding it might help the economy, and a sense of caution would have to be built in. To a question on investments in the economy, she said that companies' and banks' balance sheets have become healthier, and the corporate tax rate was cut to boost investments. Referring to what the minister was hearing from observers and her own interactions with business leaders, Sitharaman asked if businesses were sitting on passive, investible funds. 'That is, investible funds that are being engaged passively rather than investing and expanding capacity. That is an issue that I would obviously want the industry to speak about.' On trade, she said bilateral trade has now taken priority over multilateral trade, though she could not comment on the merits of this trend. The minister added that negotiations for trade deals are well progressing with the US and the EU.
Time of India
3 hours ago
- Time of India
China PM warns against a global AI 'monopoly'
China PM warns against a global AI 'monopoly' China will spearhead the creation of an international organisation to jointly develop AI, the country's premier said, seeking to ensure that the world-changing technology doesn't become the province of just a few nations or companies. Artificial intelligence harbours risks from widespread job losses to economic upheaval that require nations to work together to address, Premier Li Qiang told the World Artificial Intelligence Conference in Shanghai on Saturday. That means more international exchanges, Beijing's No 2 official said during China's most important annual technology summit. Li didn't name any countries in his short address to kick off the event. But Chinese executives and officials have taken aim at Washington's efforts to curtail the Asian country's tech sector, including by slapping restrictions on the export of Nvidia chips crucial to AI development. On Saturday, Li acknowledged a shortage of semiconductors was a major bottleneck, but reaffirmed President Xi Jinping's call to establish policies to propel Beijing's ambitions. The govt will now help create a body - loosely translated as the World AI Cooperation Organization - through which countries can share insights and talent. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like The Most Beautiful Female Athletes Right Now Undo "Currently, key resources and capabilities are concentrated in a few countries and a few enterprises. If we engage in technological monopoly, controls and restrictions, AI will become an exclusive game for a small number of countries and enterprises," Li told hundreds of delegates huddled at the conference venue on the banks of Shanghai's iconic Huangpu river. China and the US are locked in a race to develop a technology with the potential to turbocharge economies and - over the long run - tip the balance of geopolitical power. This week, US President Donald Trump signed executive orders to loosen regulations and expand energy supplies for data centers - a call to arms to ensure companies like OpenAI and Google help safeguard America's lead in the post-ChatGPT era. At the same time, the breakout success of DeepSeek has inspired Chinese tech leaders and startups to accelerate research and roll out AI products. The weekend conference in Shanghai - gathering star founders, Beijing officials and deep-pocketed financiers by the thousands - is designed to catalyze that movement. The event, which has featured Elon Musk and Jack Ma in years past, was launched in 2018. This year's attendance may hit a record because it's taking place at a critical juncture in the global race to lead GenAI development. It's already drawn some notable figures: Nobel Prize laureate Geoffrey Hinton and former Google chief Eric Schmidt were among heavyweights who met Shanghai party boss Chen Jining Thursday, before they were due to speak at the event.
Indian Express
3 hours ago
- Indian Express
India, China marking a beginning, sense of caution would have to be built in: FM Nirmala Sitharaman
India and China are beginning to move towards more access and interactions that might help the economy, even as a sense of caution would have to be built in, Finance Minister Nirmala Sitharaman said on Saturday. She also underlined that maintaining growth is India's top priority along with the need to be a dynamic player in global institutions and redefining its role in the global South, and having a friendly and attractive FDI policy to be able to get more and more investments. When asked about the thaw in Indo-China relations at the launch of the book A World in Flux: India's Economic Priorities with the recent relaxation of visa norms, Sitharaman said not just India but China has also shown interest in these interactions and one will have to 'wait and see' how far it will go. Citing the restrictions earlier enlisted in Press Note 3 that had put curbs on investments from China, which also affected some of the projects including those in the renewable energy sector, Sitharaman said there was lull during the tariff war between the US and China. But, now it has been felt by both India and China for the 'need to have more access and a lot more interactions that could possibly open some windows'. 'And that's not just from our side, even the Chinese have been approaching through the MEA. So, you had External Affairs Minister S Jaishankar go. There is something, some kind of a beginning, as to how much it will take us far; how far it will go is something we will have to wait and see. But it might help the economy; however much, a sense of caution would have to be built in,' she said. Last week, External Affairs Minister S Jaishankar travelled to China where he had underlined that 'differences should not become disputes' nor should 'competition ever become conflict' and that while India and China have made good progress in the past nine months towards the normalisation of bilateral relations, they should work to address de-escalation on the border. India had earlier put restrictions on investments from China through Press Note 3 in April 2020 to curb potential opportunistic takeovers of Indian companies during the Covid-19 pandemic by making a government approval mandatory for all investments from countries sharing a land border with India, including China. It continued to be in force in the wake of national security concerns due to border tensions after the Galwan clash. Enlisting India's priorities, Sitharaman said growth is the topmost priority. 'Growth is the topmost priority, and therefore, it will have an overlap with: do you create jobs, do you have that value addition,' she said. The Indian economy grew by 6.5 per cent in FY25, the slowest in four years as against 9.2 per cent growth in FY24. For the current financial year 2025-26, the Economic Survey has projected GDP growth at 6.3-6.8 per cent, while the RBI has lowered its growth forecast to 6.5 per cent from an earlier level of 6.7 per cent for FY26. The second objective for India would be to be relevant on the global stage, she said. 'Not just to be there in the leadership position but to be able to define how this move is going to take India forward along with the rest of the countries. We need to define the global institutions which are going to govern us for the next hundred years,' she said. Within India, Sitharaman said the government will have to focus on whether it is giving the economy the necessary support and attending to every aspiring section's aspirations, not just by giving money but by giving an overall ecosystem through which they can aspire to grow. Finding resources for meeting domestic economic aspirations within fiscal constraints is another priority for the government, she said. Another priority would be to make sure that the FDI policy is friendly and attractive to be able to get more and more investments happening in India. On the issue of trade pacts, Sitharaman said agreements are taking priority over multilateral trade even though she can't comment if it's good or bad as of now. 'On the bilateral trade front, we are moving forward and we have seen bilateral agreements being signed in the last four to five years with Australia, UAE, EFTA and the UK. Negotiations are progressing well with the United States as well as the European Union,' she said.
