Demand For Marico, Godrej Consumer Products Remained Sluggish In June Quarter

Marico Ltd. and Godrej Consumer Products Ltd. informed the exchanges Wednesday that demand for their products has remained sluggish in the quarter ended June.

That's an extension of a trend from last month when volumes of India's four largest consumer goods makers grew at the slowest pace in seven quarters.

Marico said a moderation in demand was evident in consumer sentiment indicators with the persistence of sluggishness in wholesale channels. Growth in rural segment continued to stay ahead of the urban segment, it said, even as modern trade channels including e-commerce continued to drive growth for the company.

Recovery in cash liquidity in the hands of consumers after the late onset of monsoon will be important to monitor for signs of revival, said Marico.

India is in the grip of a consumption slowdown as passenger and two-wheeler makers sold fewer vehicles since September last year, partly due to rising upfront and insurance costs and a liquidity crunch. That led to the government saying last month that declining growth in private consumption—apart from tepid increase in fixed investment and muted exports—caused a “slight” slowdown in the year ended March.

Marico said Parachute rigid packs—which contribute 38 percent to its total revenue—witnessed a strong start at the beginning of the June quarter, but the volumes of some variants declined towards the end of the three-month period. The performance of edible oil and health foods segment under Saffola brand was below its expectations, the company said.

Godrej Consumer Products said in its statement that demand across geographies has been “soft” for the quarter ended June. Volumes in India were seen in “mid-single digits” though demand remained sluggish, the statement said, with growth led by new launches and effective marketing.

Godrej Consumer's growth in Indonesia was in mid-single digits in constant currency terms. Growth in west and south African markets remains steady due to its haircare brand, Darling.