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Rising input costs are likely to put pressure on operating margins for Indian fast-moving consumer goods companies in the September quarter, even as resilient demand and growth in key product categories support revenue expansion. A sharp rise in crude oil and its derivative products used in packaging, along with a persistent inflationary trend in various commodities and deficit rainfall, has increased cost pressures across companies depending on their product mix, pricing power and cost-saving measures. A report from brokerage ICICI Direct said higher crude and crude-derivative prices, coupled with increases in other key input costs, are likely to affect earnings before interest, taxes, depreciation and amortisation (EBITDA) margins of most home and personal care companies. "Spike in the crude oil/crude derivative prices coupled with increase in the other key input prices will have impact on the EBITDA margins of most of the home care and personal care companies under coverage," it
FMCG companies are likely to hold prices through the festive season despite a rise in commodity prices, including sugar, and the impact of geopolitical disruptions, as they seek to protect consumer demand and maintain volume growth amid improving consumption. Leading industry executives said companies have already gone for judicious increases of around 2-5 per cent in the June quarter to partly offset higher input costs and are unlikely to raise prices further before the end of the festive season, even as margins remain under pressure. The sector has been facing renewed cost pressures, with sugar prices touching a new high, alongside a sharp increase in costs of key inputs such as edible oils, coffee, cocoa and crude oil derivatives used in packaging, amid geopolitical disruptions and supply concerns in global markets. While most companies have absorbed a significant part of the inflation through cost-control initiatives and portfolio management, they remain focused on protecting ..
Tata Consumer Products Ltd (TCPL) expects to maintain double-digit revenue growth in FY27, driven by healthy consumer demand, strong volume-led expansion and continued momentum from its fast-growing food and beverage businesses, MD & CEO Sunil D'Souza said. The Tata Group FMCG major, which reported a 12 per cent rise in revenue, 19 per cent growth in EBITDA and a 29 per cent increase in net profit in the June quarter, also said it may take 'calibrated price' hikes across select categories if elevated commodity, packaging and energy costs persist. "We expect consumption demand to remain healthy. The better part of the growth is that it is volume-led across categories, which indicates underlying consumer demand," D'Souza told PTI in an interview. According to him, the recent recovery in consumer demand has been aided by measures such as income tax relief, GST recalibration and continued government capital expenditure. "The whole trend for the FMCG space is very heartening because ...
Rising input costs due to commodity inflation and geopolitical uncertainties are prompting leading FMCG makers to implement calibrated price hikes in the September quarter, as they remain optimistic about demand, citing resilient consumption trends, premiumisation, and improved revenue growth. The FMCG sector, which took an average hike of around 2-5 per cent in the June quarter, is going for shrinkflation by reducing the grammage weight or selective pricing actions in the current quarter to protect margins, even as they stay watchful of inflationary pressures, crude oil volatility and weather-related risks such as the monsoon and El Nino. Leading bakery food company Britannia said it expects to add another 1.5 to 2 per cent in pricing in the second quarter through "shrinkflation" in its Rs 5 and Rs 10 biscuit packs, as commodity prices for sugar and palm oil are on the higher side. Britannia said its Q1 pricing-led growth came mainly from shrinkflation, and expects further pricing