FMCG margins get a leg up on lower input costs, higher product prices

Paint, soap makers to ride on lower crude oil & palm oil; weaker farm produce to aid F&B sector

Sheetal Agarwal 

Even as consumption demand in rural and urban markets remains under pressure, fast-moving consumer goods (FMCG) companies have some reason to cheer. With crude oil and palm oil prices near their three- and five-month lows, respectively, input cost inflation for companies making paints and soaps such as Asian Paints, Hindustan Unilever (HUL), Godrej Consumer Products and Pidilite could come down. Interestingly, most of these companies have already reduced the promotional intensity and/or taken price hikes in these products to reflect the increase seen earlier in input costs on a ...

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FMCG margins get a leg up on lower input costs, higher product prices

Paint, soap makers to ride on lower crude oil & palm oil; weaker farm produce to aid F&B sector

Even as consumption demand in rural as well as urban markets remains under pressure, fast moving consumer goods (FMCG) companies have some reason to cheer. With crude oil as well as palm oil prices near their three-month and five-month lows, respectively the input cost inflation for companies making paints and soaps such as Asian Paints, Hindustan Unilever (HUL), Godrej Consumer Products, Pidilite, amongst others could come down. Interestingly, most of these companies have already reduced the promotional intensity and/or taken price hikes in these products to reflect the increase seen earlier in input costs on a year-on-year basis. Both these factors will aid their margins in the near term. In fact, price hikes could also aid realisations and compensate for continued weakness in volumes to some extent, believe analysts. The rupee, too, has strengthened in recent times and is hovering around its year high now. This also benefits consumer companies as it further reduces the cost of ... Even as consumption demand in rural and urban markets remains under pressure, fast-moving consumer goods (FMCG) companies have some reason to cheer. With crude oil and palm oil prices near their three- and five-month lows, respectively, input cost inflation for companies making paints and soaps such as Asian Paints, Hindustan Unilever (HUL), Godrej Consumer Products and Pidilite could come down. Interestingly, most of these companies have already reduced the promotional intensity and/or taken price hikes in these products to reflect the increase seen earlier in input costs on a ... image
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