ITC, Marico, Emami, Dabur India, Colgate-Palmolive (India) and United Breweries trading lower by 1% each on the BSE.
At 11:36 a.m. S&P BSE FMCG index was up marginally by 0.13%, while NSE FMCG index down 0.08% as compared to nearly 1% gain in the benchmark indices.
Thus far in 2016, HUL, Dabur India, Godrej Consumer Products, Britannia Industries, GlaxoSmithkline Consumer Healthcare and United Breweries seen their market price decline by an over 10% each till Friday. The S&P BSE FMCG index dipped 8% and S&P BSE Sensex fell 6.4% during the same period.
ITC was down 1% at Rs 306, after hitting intra-day low of Rs 304 on the BSE. The company’s cigarette revenues for the quarter ended December 2015 (Q3) grew 5.7% year-on-year (YoY), while FMCG growth moderated to 7.1% YoY on sluggish demand and supply disruptions caused by Chennai floods.
Weak demand - particularly in rural markets – coupled with a price deflationary environment and supply chain disruption caused by heavy rainfall and floods in Chennai impacted revenue growth, ITC said in a statement.
HUL was up 1.4% at Rs 783, recovering nearly 2% from its 52-week low of Rs 770 touched on BSE in early morning trade. Colgate-Palmolive (India) down 1% at Rs 871, also its 52-week low, ahead of its Q3 earnings tomorrow.
Revenue growth for large multinational FMCG companies would remain weak on back of decelerating rural demand and economic slowdown. Further the withdrawal of tax benefits would impact net sales growth, said Centrum Broking in Q3 preview.
According to Elara Capital, despite favorable contribution from a late festive season aiding Q3 sales, volume growth does not bring a lot of cheer to companies.
A late winter this year that impacted sales of winter products, along with floods in Chennai and closure of India- Nepal border affected sales of FMCG companies, the broking firm said in a report.