In the brokerage coverage companies, it expects the Ebitda margin to decline on a YoY basis to 140 bps (+57 bps QoQ) mainly due to rising raw material prices and inflationary pressures. Net profit to remain flat YoY due to negative operating leverage and gross margin pressures.
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DRChoksey Report
Consumption trends in Q4 FY25E remained mixed, with staple companies expected to report marginal volume growth. Inflationary pressures on discretionary spending weighed on major FMCG players such as HUL, Nestle India, Britannia, and Tata Consumer Products.
Weak urban demand, coupled with high palm oil prices, particularly affected the personal wash segment.
Despite sluggish demand, easing retail inflation, mainly due to falling food prices may offer some relief by boosting consumers' buying power and helping stabilize demand in staple categories. Additionally, monetary policy easing is likely to reduce borrowing costs, potentially improving margins for consumer companies.
However, volume growth may remain subdued as discretionary spending continues to face challenges, impacting the pace of recovery.
On the commodity front, agricultural inflation persisted in Q4 FY25, affecting raw material costs for FMCG players. However, non-agricultural commodities, including crude oil, showed a declining trend, easing some cost pressures.
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