Indian FMCG companies poised for growth in 2023 - Goldman Sachs

Emami

05/01/2023 07:49

** Indian fast moving consumer goods (FMCG) firms would see
acceleration in earnings growth in 2023, driven by strong margin
expansion and moderate improvement in volume growth, Goldman
Sachs said
    ** "There is strong visibility for margin expansion driven
by lower commodity costs especially palm oil and crude
derivatives," Goldman analysts said in a note dated Jan 4
    ** FMCG companies faced extremely high input cost inflation
in 2022, driven by the surge in commodity costs such as crude
and palm oil post the beginning of the Ukraine conflict
    ** However, GS cautioned that volume growth improvement
would be more gradual and modest, as overall price inflation
moderates and rural demand seeing some improvement 
    ** Godrej Consumer Products  GOCP.NS  and Marico  MRCO.NS 
had flagged muted rural demand in Q3, but recovery in high-end,
urban-focused products
    ** Goldman sees largest gross margin tailwinds in home,
personal care cos such as Godrej Consumer, Hindustan Unilever
 HLL.NS , Dabur India  DABU.NS , Marico and Emami  EMAM.NS  
    ** Among foods companies, Britannia  BRIT.NS  will gain the
most having a large palm oil input component - Goldman Sachs
    ** Nifty FMCG index  .NIFTYFMCG , which rose more than 17%
in 2022, was last up nearly 1%
 (Reporting by Nishit Navin in Bengaluru)
 ((nishit.navin@thomsonreuters.com;))