Demand trends in FMCG sector 'stable' in June quarter; expected pickup in rural areas remained elusive: Marico

economictimes.indiatimes.com:

demand trends in the FMCG sector remained «stable» but the anticipated pickup in rural demand remained elusive in the June quarter, according to Marico. The company — which owns Saffola, Parachute, Hair & Care, among other brands — also said that consumer demand from rural India will recover for the rest of the year as inflation is moderating.

In its update for the June quarter, Marico said that though the urban markets were steady during the April-June period, the anticipated pickup in rural demand remained elusive. «Moderating headline inflation, hike in MSPs, easing liquidity pressures and forecast of a near-normal monsoon continue to fuel hopes of a gradual recovery in rural demand in the course of the year,» Marico said.

While noting that demand trends in the FMCG sector remained «stable» in the June quarter, Marico said its performance of Marico's domestic business was affected as it recorded a low-single-digit volume growth. This was on account of a «significant trade destocking» in Saffola Edible Oils in reaction to sharply falling vegetable oil prices.

Also, there were channel inventory adjustments in core portfolios triggered by the last leg of trade scheme rationalisation for correction of the historical Q1 revenue skew. «In the given context, domestic volumes grew in low-single digits, with a minor volume drop in Parachute Coconut Oil, low double-digit volume growth in Saffola Edible Oils and a flattish quarter for Value Added Hair Oils,» it said.

Among the newer portfolios, food continued its strong run while premium personal care (including the digital-first portfolio) remained steady. The company expects a «visible pickup» from the coming quarter given the sustained healthy trends in offtakes, market share