Most FMCG cos to see topline growth in Q2: Sharekhan
Sharekhan expects that most FMCG companies will see a growth in their topline in the September 2008 quarter driven mainly by price increases.
By ET Online |
MUMBAI: Sharekhan expects that most FMCG companies will see a growth in their topline in the September 2008 quarter driven mainly by price increases, coupled with a comparatively lower volume growth.
In the case of ITC, Sharekhan expects the overall cigarette volume to witness a dip of only 2 per cent year on year in Q2 FY 09, at a time when the company hiked prices by 6-7 for its cigarette brands. However, the performance of ITC's non-cigarette FMCG business is expected to be mixed -- for instance, hotel business could only report a modest growth in topline in Q2 FY 09.
Overall, Sharekhan expects ITC's total revenues to grow by 16.6% to Rs3,815.7 crore in Q2FY2009, while its operating profit margin (OPM) would take a dip of 234 basis points yoy to 29.2%, on account of higher losses in its non-cigarette FMCG business and an increase in the contribution from the low-margin agri-business.
In the case of Marico, Sharekhan expects this FMCG company to post a robust revenue growth of 23.9 per cent in the September quarter, helped by decent volume growth and earlier price hikes for its range of hair oils and edible oils business.
However, analysts at this brokerage house point out that higher costs of key raw materials like copra and kardi oil could put pressure on Marico's operating profit margins in the September 2008 quarter.
In the case of ITC, Sharekhan expects the overall cigarette volume to witness a dip of only 2 per cent year on year in Q2 FY 09, at a time when the company hiked prices by 6-7 for its cigarette brands. However, the performance of ITC's non-cigarette FMCG business is expected to be mixed -- for instance, hotel business could only report a modest growth in topline in Q2 FY 09.
Overall, Sharekhan expects ITC's total revenues to grow by 16.6% to Rs3,815.7 crore in Q2FY2009, while its operating profit margin (OPM) would take a dip of 234 basis points yoy to 29.2%, on account of higher losses in its non-cigarette FMCG business and an increase in the contribution from the low-margin agri-business.
In the case of Marico, Sharekhan expects this FMCG company to post a robust revenue growth of 23.9 per cent in the September quarter, helped by decent volume growth and earlier price hikes for its range of hair oils and edible oils business.
However, analysts at this brokerage house point out that higher costs of key raw materials like copra and kardi oil could put pressure on Marico's operating profit margins in the September 2008 quarter.
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