FMCG Q2 Earnings Review - Decent Operating Performance; H2 Commentary Remains Positive: Nirmal Bang

Value growth for the fmcg industry improved marginally to high single digits, driven by higher pricing.

<div class="paragraphs"><p>FMCG products kept on shelves inside DMart. (Source: BQ Prime)</p></div>
FMCG products kept on shelves inside DMart. (Source: BQ Prime)

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. 

Nirmal Bang Report

Through this update, we take a review of the Q2 FY23 performance of our fast moving consumer good coverage universe. Value growth for the fmcg industry improved marginally to high single digits, driven by higher pricing.

Volumes continued to decline in both urban as well as rural markets with a more pronounced drop in the latter. Q2 FY23 topline of our fmcg universe grew by 17.3% YoY, 2.6% ahead of our estimate, largely led by:

  1. higher pricing growth in Britannia Industries Ltd.’s standalone business,

  2. ITC Ltd.’s fmcg business (cigarette and non cigarette) and

  3. Nestle India Ltd.’s domestic business.

Consumer staples revenue (fmcg, excluding ITC and Gillette India Ltd.) grew by 13.5% YoY.

The three-year revenue compound annual growth rate for fmcg/consumer staples universe stood at 11.2%/11.1%. While volume growth for majority of coverage companies was in-line with our estimates, ITC’s (calculated) cigarette volume surprised us positively.

As expected, persistent inflation and consumption of high-cost inventory exerted pressure on Q2 FY23 margins.

Click on the attachment to read the full report:

Nirmal Bang Consumer FMCG Sector - Q2FY23 Result Review.pdf


This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.