Marico, Godrej Consumer, Dabur say sequential recovery in Q1; maintain caution on commodity inflation
Godrej Consumer Products
,
Marico
and
Dabur
indicated sequential recovery in urban and rural markets for the April-June '25 quarter in their respective quarter updates on Friday aided by easing inflation of some commodities, good monsoons and policy incentives, signalling some relief for the sector after five quarters of slowing demand. However, the companies said some of the momentum was impacted by summer rains denting demand for seasonal products and cautioned that select inflationary trends continued.
'During the quarter, the sector exhibited consistent demand patterns, marked by improving trends in rural markets and steady urban sentiment. We expect gradual improvement in the quarters ahead, supported by easing inflation, a favourable monsoon season and policy stimulus,' Marico, maker of Parachute hair oils and Saffola edible oils, said.
The company noted that underlying volume growth in the India business continued to improve sequentially to reach a multi-quarter high.
Researcher NielsenIQ had said in its January-March quarter update that volume growth, or number of units sold, had slowed down in the March quarter to 5.1% compared to 6.1% in the year-ago quarter, as consumers switched to small-value packs amid inflation and cutback on discretionary spending. The researcher had said the FMCG industry grew 11% year on year by value, driven by a 5.6% price hike. NielsenIQ has not yet released April-June quarter data.
Godrej Consumer Products, which makes Cinthol soap and Goodknight repellents, said in its quarter review that it expects consolidated revenue to grow in double-digits, and standalone revenue to report high-single digit growth on the back of underlying volume growth (UVG). 'Volume growth has been strongly competitive and is sequentially Improving,' the company said.
Godrej said palm oil prices, a key ingredient for soaps, have started to moderate from Jun'25 end, and benefit of the same is likely to flow in 2HFY26.
Dabur, which makes Real juice and Vatika shampoo, said it expects sequential urban recovery on the back of favourable monsoons, strong farm output, easing inflation and government measures supporting consumption as factors that would support higher revenue growth in the coming quarters.
'Due to the decline in beverages, Dabur's consolidated revenue is expected to rise in the low single digits, with operating profit growth marginally trailing revenue growth,' Dabur said in a stock exchange filing. It added that investments in brand building, distribution, backend strengthening and operational efficiency will continue through the year.
However, concerns of inflation of some key commodities persist, impacting gross margins which could continue to be under incremental pressure on a high base, the FMCG companies noted.
'Among key inputs, copra prices continued to witness sequential inflation, which was heightened by unseasonal rainfall patterns. Vegetable oil prices eased following the cut in import duty, while crude oil derivatives remained rangebound,'
Marico
said.
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