FMCG major Godrej Consumer Products Ltd (GCPL) on Friday said it has recorded volume growth in the July-September quarter of this fiscal, even as the industry is facing a consumption slowdown.
GCPL in a quarterly updates to the regulatory exchanges said that it expects “higher than mid single digit volume growth” in the third quarter of of this year.
For the domestic market, the company expects its sales value growth to be “very close to the last quarter’s sales value growth”.
The Godrej group firm registered volume growth helped by recovery in its household insecticides segment, new product launches and marketing campaigns along with consumer offers, GCPL said.
“In India, demand continued to be challenging, impacted by a general consumption slowdown. Despite sluggish demand conditions, we recorded higher than mid single digit volume growth,” said GCPL.
However, GCPL expects a gradual improvement in consumer demand in the quarters ahead, aided by a good monsoon and government efforts to stimulate the economy.
Meanwhile, for the international markets, which contributes nearly half of GCPL’s business, the company witnessed relatively mixed demand across its geographies of operations.
In Indonesia, the company recorded low double digit constant currency sales growth, while its Africa, USA, Middle East business, recorded a “low single digit decline” in constant currency sales growth.
In Latin America, despite currency depreciation in Argentina, volume and value growth have been robust, the company said.
Earlier, this week another FMCG firm Marico had said that demand and consumer sentiment in Q2/FY 2019-20 was weak, resulting in slower growth in its categories.
During the quarter, traditional channels both in rural and urban markets faced distress, Marico had said, which has brands like Parachute, Saffola and Hair & Care.
In July, data analytics firm Nielsen in a report had said that the FMCG sector in India will face a slowdown in 2019 with a growth rate of around 9-10 percent impacted by a dip in demand, particularly the rural.
According to the report, the demand is impacted by rural sales, which contribute around 36-37 percent of the total FMCG sales.―Business Standard