Q3 result preview: FMCG sector expected to see mid single-digit volume growth, margin expansion trend to continue
Also Read: Q3 result preview: NBFCs likely to see healthy profit growth of 27% YoY amid moderating margins A delayed winter has shrunk demand for seasonal categories during the quarter, falling short of initial expectations across FMCG companies. In terms of categories, food and beverages is anticipated to outperform home and personal care, said Elara Securities.
According to the brokerage estimates, the FMCG companies are likely to report revenue and volume growth of 5% each year-on-year (YoY) in Q3FY24 with a four-year CAGR 10.4% versus 10.6% in Q2FY24. Companies that prioritize expanding their distribution networks, such as Mrs.
Bectors Food Specialities, Jyothy Labs, Nestle India and Tata Consumer Products experience stronger revenue growth. Also Read: Q3 likely to be last weak quarter, expect revenue growth for Indian IT firms from Q4: BNP Paribas The October-December 2023 quarter saw a decline in the prices of essential raw materials, excluding wheat, sugar, and milk.
The fall in input cost prices has led to resurgence of local regional firms, offering good quality products and gaining market share. While incremental price cuts are small, companies are increasing advertising and offering extra incentives to channels to remain competitive with regional brands, Elara Securities said.
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