The Financial Express

FMCG company chiefs expect double-digit growth in Q3

6 January 2009  

Mumbai: The Rs 85,000-crore Indian FMCG industry is expected to register a healthy growth in the third quarter of 2008-09 despite the economic downturn. The industry is expected to register a 15% growth in Q3 2008-09 as compared to the corresponding period last year, predict industry analysts.

“Unlike other sectors, the FMCG industry did not slow down since Q2 2008. We certainly expect a decent sales growth in Q3,” said an industry analyst based in Mumbai.

Industry captains in the FMCG sector are also optimistic about the industry’s performance in Q3 2008-09. Adi Godrej, chairman of the Godrej Group, said, “I think the Indian FMCG industry’s sales growth should be good in Q3. My expectation is that the industry will register a 25% sales growth in Q3 2008-09.”

Sharing similar sentiments, Amit Burman, vice-chairman of Dabur India Ltd, said that the industry will perform well in Q3 2008-09.

“I expect the industry to post strong sales growth in Q3. The reason is simple-rural demands have increased in India as people are spending more on day-to-day needs. As oil prices have come down, we will be able to sustain our price points in 2009,” he added.

Bharat V Patel, chairman, Procter & Gamble Hygiene and Health Care Ltd, is very optimistic about the growth of the industry in Q3.

“The industry will register growth in sales as well as profits in Q3. I think the growth momentum will continue in Q4. I expect the industry’s sales growth to range 10-20% for different companies.”

According to Patel, the industry is not affected by the economic slowdown as yet, as consumers need day-to-day goods. Sunil Duggal, chief executive officer, Dabur India, expects the industry to perform well in Q3.

“Despite sales growth, I think there will be pressure on margins on account of input costs. As inputs costs are coming down now, I expect better results in Q4,” he added.

Sangeeta Talwar, executive director (marketing), Tata Tea Ltd, expects the industry to grow by 15% in the third quarter of 2008-09. In essence, a double-digit growth is expected in earnings and revenues of FMCG companies in Q3 2008-09, predict analysts.