Domestic FMCG maker Dabur is expected to report mid-to-high single-digit growth in its consolidated revenue, supported by mid-single-digit volume growth in the domestic market.
Marico said its consolidated revenue rose in the high single digits in the June quarter, while the domestic business delivered “modest increases in underlying volume growth” sequentially.
Adani Wilmar, which sells edible oils and plays a minor role in food products under the Fortune brands, also reported 13 percent overall volume growth in the June quarter.
Its food and FMCG business volumes grew 23 percent year-on-year, Adani Wilmar said.
Regarding margins, manufacturers expect year-on-year expansion due to factors such as softer commodity prices and cost-saving initiatives.
“Commodity prices were stable during the quarter,” Dabur said, adding that “gross margin is likely to see some expansion due to rollover price increases and cost-saving initiatives.”
Marico, which owns brands like Sefola, Parachute, Hair & Care, Nihar and Livon, also expects gross margin expansion year-on-year.
Among key inputs, copra prices remained flat in line with estimates, while edible oil and crude oil derivatives remained range-bound.
“Operating profit is expected to slightly outpace revenue leading to a marginal increase in operating margin year-on-year,” it said.
Regarding rural market sales, Dabur said that in the June quarter, Dabur saw a gradual improvement in demand trends with growth from those areas.
“With the forecast of a normal monsoon and the government’s continued focus on macroeconomic growth, we expect the reforms to accelerate in the coming months,” said Dabur, which owns brands like Dabur Chyawanprash, Dabur Honey, Dabur Pudinhara, Dabur Lal Tail. Dabur Amla, Dabur Red Paste, Real and Vatika.
According to Abneesh Roy, executive director (research) at Nuwama Institutional Equities, volume growth is likely to be in the low-to-mid-single-digits, mostly due to the heatwave, general elections and fewer wedding days.
“Rural demand continues to see gradual but slight green shoots as real rural wages remain muted,” he said.
Both Dabur and Marico have reported growth in their international business.
The Merivala family promoted Marico saying its international business is expected to post “strong growth” in constant currency terms. However, severe currency devaluations in Turkey and Egypt continued to weigh on translation growth.
Dabur said its international business “delivered double-digit sustained currency growth” driven by resilient and broad-based growth across markets.
Last week, Crisil Ratings in a report estimated revenue growth of 7-9 per cent for FMCG players this fiscal, supporting higher volume growth due to revival in rural demand and sustained demand from urban areas.
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