HUL, Tata Consumer and Nestle India's margins gain on premiumisation, cost cuts
FMCG companies — Hindustan Unilever (HUL), Tata Consumer Products (TCPL) and Nestle India — declared March quarter results. Here are key takeaways:
Margins & Volumes
While volume growth was tepid to modest for the three companies, gross margins have expanded. Margin expansion has been achieved through better operational efficiency or productivity gains. Taking price rises, lowering ad spends and rationalising costs are the various levers used.
In case of TCPL, improvement in international business margins aided overall margin expansion. HUL's gross margin expanded due to lower input cost and better product mix. High realisations and lower input cost enabled Nestle India's margin expansion.
Premiumisation
Despite overall growth being subdued, HUL's premium portfolio across categories continued to do well. Premium skin care products grew at strong double digits.
For TCPL, premium and sub-premium segments outperformed the overall business of Indian beverages, comprising over two-thirds of Indian tea sales. The company launched 18 new premium products in FY24 against 6 in FY23. Value-added salts grew 34% in FY24 and accounted for 9% of the Indian salt business. Nestle India announced foray into premium coffee through its brand Nespresso and is focussed on adding more premium products to its portfolio.
E-commerce & quick commerce
For FY24, HUL's beauty and skin care category posted 50% ecommerce growth. TCPL posted 35% ecommerce channel growth. Ecommerce contributed 6.8% of Nestle's revenue.
It leveraged this
