FMCG cos expect double-digit growth in Q3

The Rs 85,000-crore Indian FMCG industry is expected to register a healthy growth in the third quarter of 2008-09 despite the economic downturn. The industry is expected to register a 15% growth in Q3 2008-09 as compared to the corresponding period last year, predict industry analysts.   Industry captains in the FMCG sector are also optimistic about the industry's performance in Q3 2008-09. Adi Godrej, chairman of the Godrej Group, said, "I think the Indian FMCG industry's sales growth should be good in Q3. My expectation is that the industry will register a 25% sales growth in Q3 2008-09."

Sharing similar sentiments, Amit Burman, vice-chairman of Dabur India Ltd, said that the industry will perform well in Q3 2008-09.   "I expect the industry to post strong sales growth in Q3. The reason is simple-rural demands have increased in India as people are spending more on day-to-day needs. As oil prices have come down, we will be able to sustain our price points in 2009," he added.

Bharat V Patel, chairman, Procter & Gamble Hygiene and Health Care Ltd, is very optimistic about the growth of the industry in Q3.

"The industry will register growth in sales as well as profits in Q3. I think the growth momentum will continue in Q4. I expect the industry's sales growth to range 10-20% for different companies."

According to Patel, the industry is not affected by the economic slowdown as yet, as consumers need day-to-day goods. Sunil Duggal, chief executive officer, Dabur India, expects the industry to perform well in Q3.

"Despite sales growth, I think there will be pressure on margins on account of input costs. As inputs costs are coming down now, I expect better results in Q4," he added.

Sangeeta Talwar, executive director (marketing), Tata Tea Ltd, expects the industry to grow by 15% in the third quarter of 2008-09.

"I think the industry is doing pretty well, bucking the trend. As it is meeting the every-day demands of consumers, it will continue to grow. In the last two months, input costs have come down and this will reflect in Q3 and Q4 results," she added.

In essence, a double-digit growth is expected in earnings and revenues of FMCG companies in Q3 2008-09, predict analysts.

 

Courtesy:ibef

Retail sector to grow to US$ 590 billion in 2012

The unorganised retail sector is expected to grow at about 10 percent per annum to reach US$ 496 billion in 2011-12 despite the steady expansion of organised retailers, according to a study by Indian Council for Research on International Economic Relations (ICRIER), a Delhi-based think tank.

The report on the impact of organised retail on small shop owners said the retail business in India would grow at 13 per cent annually from US$ 322 billion in 2006-07 to US$ 590 billion in 2011-12. The unorganised retail industry was valued at US$ 309 billion in 2006-07.

The organised retail that now constitutes a small four percent of the total industry is also likely to grow at a much faster pace of 45-50 per cent per annum and quadruple its share in total retail trade to 16 per cent by 2011-12, the report further stated. According to ICRIER, consumers have gained with the entry of organised retailers and their overall spending has also gone up. Furthermore, all income groups have also saved through organised retail purchases, especially the lower income consumers.

The report said farmers benefit significantly from the option of direct sales to organised retailers. The profits
earned by farmers from selling directly to the organised retailers are about 60 per cent higher than that they
receive from selling in local markets.

The study made certain recommendations like facilitation of cash-and-carry outlets, like Metro, for selling farmers' produce to unorganised retailers. Additionally, it urged for encouraging cooperatives and associations of unorganised retailers for direct procurement from suppliers and farmers. A move towards a nationwide uniform licensing regime in the states to facilitate modern retail and simplification of the licensing and permit regime for organised retail have also been recommended.

Courtesy:ibef