After a modest growth in the December quarter, the FMCG companies are seeing a rather slow growth in the March quarter. The companies are now in a hurry to arrest the further decline in growth and volumes. Most of the companies have slashed down their prices or retained their prices on major portfolios.
The companies have brought down the prices of palm oil and this certainly will benefit the customers, especially when it comes to soaps. Companies will certainly reap benefits because of this move but when it comes to advertisements the trend is expected to slow down.
The companies were seen investing heavily in advertisement campaigns last quarter and that trend is expected to change and decline in the March quarter. To put it simple, the companies are facing financial hitches and are facing a cash crunch to launch high-decibel ad campaigns. Since the advertisement spending is expected to decline, the companies may reap benefits out of heavy investments in this quarter.
Hindustan Unilever Limited, one of the major companies in the FMCG sector has reduced the prices of its soaps and detergents to the benefit of customers. The spending trends in skin-care products and foods remain muted and this will have a impact on the sales of the companies. The growth in this quarter is expected to slow-down for the companies and they are finding ways to come out of it.
ITC is expected to maintain its growth in cigarette sales and the volume growth is expected to be affected in the short term. Dabur is also expected to perform well this quarter. ITC, Dabur and Godrej are the companies that are predicted to perform better in this quarter. Emami and Jyothy labs are the other small companies in the sector that are expected to perform well. Tough conditions are set to continue for FMCG companies as the macro-economic conditions are challenging and the consumer confidence is low.
