- FMCG companies, Godrej Consumer Products Ltd (GCPL) and Marico Ltd have warned of a decline in the March quarter as the nationwide shutdown disrupted the supply of critical goods.
Fast-moving consumer goods (FMCG) companies, Godrej Consumer Products Ltd (GCPL) and Marico Ltd have warned of a decline in the March quarter as the nationwide shutdown disrupted the supply of critical goods.
In an update on its fourth-quarter earnings, GCPL, which manufactures soaps, home insecticides, and other personal care products, said it “would announce a decline in quarterly high adolescent sales” as demand fell due to the disruption of the back end and front end supply chain in the last 12 days of March.
“We had seen steady demand in our categories until the middle of March 2020. However, the adherence to social distance standards and the resulting lockdown in several geographies of our operations resulted in virtually no sales in the latter part of March, significantly affecting the output of our sales in the quarter, “GCPL said in a submission to the stock exchanges on April 8.
Supplies of its labels even at the distributor level have declined. “We saw low double-digit sales decline in our distributors ‘results, suggesting that their stock rates are being depleted,” he said.
GCPL’s overall Indian revenue is likely to see a 17 percent decline in Q4FY20 revenues, with an 11 percent decline in volume, “Nitin Gupta, an analyst at SBI Caps, said.
Since the shutdown began on 25 March, most major FMCG firms at their manufacturing plants and warehouses selling products of everyday use shuttered or scaled-down operations. Although capacities have increasingly improved, companies are still operating at sub-optimum rates of output.
The restricted movement of vehicles has stopped products from entering manufacturers and retailers.
Marico Ltd, which produces Saffola oats and cooking oils, said the Indian company generally reported a low single-digit volume decline in the March quarter. However, its Saffola portfolio saw “very skewed high growth” as demand for these products increased during the lockdown, the company said earlier this week in its fourth-quarter update. However, Marico was able to report sales largely in its portfolio of edible oils and foods.
With consumer sentiment settling now and things coming to a lot under control, we will see a rise in sales FMCG products in the coming time for sure.