How Earnings of FMCG Turned Out for Q4FY24?

Fast-moving consumer goods (FMCGs) are mass-consumption, non-durable items that are readily available off the shelf. In this article, we will discuss the earnings of FMCG giants in India.

ITC Limited: ITC is the largest cigarette manufacturer and seller in the country. ITC delivered a resilient performance during FY24 amidst a challenging macroeconomic and operating environment on a high base. The geopolitical tensions and climate emergencies have resulted in concerns over food security and food inflation, which adversely impacted the company’s Agribusiness.

The Hotels Segment achieved exceptional results, setting new benchmarks for Revenue and Profit. Retail, MICE (Meetings, Incentives, Conferences, Exhibitions), and major events held nationwide supported this segment, resulting in a strong increase in RevPar.

Hindustan Unilever Limited (HUL): Hindustan Unilever is in the FMCG business, primarily comprising Home Care, Beauty and Personal Care, and Food and Refreshment segments. Total sales amounted to ₹15,041 crore during Q4 FY2024, up by 1% compared to Q4 FY2023. The company’s estimate for above-average monsoons and improved macroeconomic indicators bode well for the future, with the expectation that FMCG demand will continue to improve steadily.

Nestle India Ltd: Nestle India Limited is a subsidiary of Nestle, a Swiss multinational company in the Food segment. For Q4 FY2024, domestic sales increased 8.9%, and total sales increased 9.3%. Domestic sales growth was widespread. For the first time, domestic sales surpassed the ₹5,000 crore milestone. The company seems to be optimistic about future growth.

Coffee and cocoa are facing historically high commodity costs due to their all-time high pricing and ongoing price increases. Prices for grains and cereals are structurally growing, helped along by MSP. It’s expected to be a rough summer, driving up milk prices.

Tata Consumer Products Ltd: Tata Consumer Products Ltd enjoys a rich presence in the food and beverages business in India and internationally. Operating revenue for the quarter increased by 9% to ₹3,927 crore. Strong operating performance and one-time tax advantages during the quarter drove the 46% increase in Group Net Profit before exceptional items to ₹427 Crores.

Britannia Industries Ltd: Britannia Industries is one of India’s leading food companies with a 100-year legacy. Britannia’s Operating Profit for the Quarter Ended March 31, 2024, is ₹708 crore (17.6% of Sales), while Consolidated Sales for the same period of the previous year were ₹4,014 crore, up 3.1%. Looking ahead, the company would continue to invest behind its brands and stay price competitive with a clear objective of driving market share while sustaining profits.

Dabur India Limited: Dabur India witnessed exceptional performance during Q4 FY2024, translated into revenue growth of 7.6% during FY2024. This was backed by the strong execution of its Power Brand strategy, Increased premiumisation, and distribution footprint expansion coupled with the benefits of its stringent cost reduction actions.

Performance of the Nifty FMCG Index

The Nifty FMCG Index is intended to represent the behaviour and performance of FMCGs. The index comprises 15 FMCG stocks on the National Stock Exchange (NSE). The Nifty FMCG index has delivered a total return of 14.28% in the past five years and 17.04% since inception. On May 27, 2024, the index closed at 55,260.50, down by 0.34%.

FMCG Sector Poised for Growth

Rising costs for goods, particularly necessities, and consumer-driven growth contributed to the expansion of the FMCG sector in India. 3 million people are employed in the FMCG sector in India, which makes up around 5% of all industrial jobs.

Through 2021–2027, the FMCG market is projected to generate roughly US$ 615.87 billion in revenue at a compound annual growth rate (CAGR) of 27.9%. PLI programmes, which aim to lower import costs, boost local capacity, improve the cost competitiveness of items produced domestically, and encourage exports, have been allotted US$ 976 million in the Union Budget 2023–2024.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.