PackMan’s weekly FMCG highlights
This week’s top stories include more Q1 results from packaging and FMCG companies, the revitalisation of rural demand, and pharmaceutical joint ventures.
06 Aug 2024 | By Anhata Rooprai
Companies will be moving forward with an end target of volume growth, because of 4–5% of expected inflation in the coming months
Britannia’s Q1 results
Britannia’s consolidated earnings for the June quarter increased to Rs 506-cr (10.5% YoY). The company’s revenue increased to Rs 4,130-cr (4% YoY). It’s operational profit margin increased to 17.7%, and EBITDA increased to Rs 753-cr (9%).
Colgate-Palmolive's first quarter
Colgate-Palmolive shares reached a record high of Rs 3,425.90 on the Bombay Stock Exchange. The company reported a 33% YoY increase in net profit in the first quarter. The oral hygiene line of products saw double-digit growth driven by high volume growth.
Dabur’s upward journey
Dabur reported a hike to Rs 500.12-cr (8%) in its net profit for the June quarter. A year ago, in the same quarter, the company had reported Rs 463.88-cr. Consolidated net profit after taxes came to Rs 1,981-cr, which was a 18% increase from Rs 1,675-cr a year earlier.
Dr Reddy’s scales up joint ventures
Pharma major Dr Reddy’s Laboratories has been forging collaborative deals and acquisitions in key fields. According to leading business portals, the company leadership sees this as a value addition to its current product portfolio.
During Q1 of FY 2024-25, the company acquired brands in the nicotine replacement therapy category in markets outside the United States of America. It also entered into a joint venture with Nestle India to bring a portfolio backed by science to Indian consumers. The joint venture with Nestle is expected to be operational by Q2.
The company also partnered with Novartis to distribute some of its anti-diabetes product offerings in the retail market in Russia. These are just some of the joint ventures that Dr Reddy’s has slated for the future.Fratelli Vineyards to list in India
Reportedly, India's second-largest wine brand, Fratelli Vineyards is set to debut on the stock exchanges. By 2028, the company aims to become a Rs 650-cr enterprise. This announcement comes after a complex merger between Fratelli Vineyards and Tinna Trade.
Premiumisation remains in focus for Marico
Marico announced an increase to Rs 464-cr (8%) in the June quarter, from Rs 427-cr in the same quarter last year. The FMCG company recorded a 6.7% increase in revenue from operations to Rs 2,643-cr for the first quarter of FY 2024-25. According to leading news portals, the company’s oil business makes up 72% of its revenue growth. Marico sells Parachute coconut oil (34% of domestic revenue), Saffola edible oils (16% of domestic revenue), and other hair oils (22% of domestic revenue).
Sun Pharmaceuticals soars
Sun Pharmaceutical Industries reported an increase in net profit for the June quarter at Rs 2,836-cr, which is a 40% increase from last year (Rs 2,0260-cr). The company’s total revenue from operations was Rs 12,653-cr (a 6% increase from Rs 11,941-cr in the same quarter last year).
TCPL’s Q1 results
The packaging giant declared their Q1 results on 30 July. The company’s top line increased by 9.23%. Its profit increased by 33.41% year-on-year (YoY). In comparison to the previous quarter, the company’s revenue increased by 1.26%, and profit by 9.28%. TCPL’s earnings per share were at Rs 34.86 for Q1, which is a 33.41% increase, YoY. Currently, the company has a market capitalisation of Rs 2,716.38-cr and a 52-week high-low of Rs 3,103.4-cr and Rs 1,581.55 respectively.
Beverage sales fall, cold drinks pick up
In the first quarter of the year, consumers preferred cold drinks during the harsh summer months. Hot beverages like tea and coffee saw a dip in sales, while products like carbonated soft drinks saw an uptick. Kantar’s FMCG Pulse report said, “For the first time ever, the penetration of bottled soft drinks has breached the 50% mark – and with the intense heat expected to return this summer the category is likely to continue its growth trajectory.”
FMCG companies plan price increases because of commodity inflation
As inflation rises in raw materials like flour, cocoa, and sugar, FMCG companies like Parle, Britannia, and Mondelez International are resorting to increasing prices by 4–10%. According to leading business portals, companies will be moving forward with an end target of volume growth, because of 4–5% of expected inflation in the coming months.