Godrej Consumer Products (GCPL), a major provider of personal and home care products, announced today that in 2023, consumer demand will be steadily recovering. After two years of weak demand in both urban and rural marketplaces that negatively impacted the performance of fast-moving consumer goods (FMCG) companies, consumers are finally returning to the market with a hankering.
The FMCG company with headquarters in Mumbai stated today in an exchange filing that it anticipates delivering healthy increases in volume offtake and value sales. Due to the players' significant price increases over the previous six to eight quarters, volume offtake had suffered, which ultimately had an effect on their profits.
“In India, consumer demand trends remained steady through the January-March) quarter, with FMCG sector expected to witness gradual recovery in growth rates. The performance of our India business has exceeded expectations especially on the volume front,” GCPL noted in the filling, adding “We expect to deliver double-digit volume and value growth. Our domestic branded business growth was very strong registering volume and value growth in teens. This is in line with our strategy of volume driven category development. Overall, the growth was broad based and led by double-digit volume and value growth in both Home Care and Personal Care”.
Although GCPL has not yet released its financial results for the current quarter, its report on the period is a positive shift that the manufacturers have been anticipating. Most FMCG companies, including Hindustan Unilever, Nestle, and Britannia, have to raise prices as long as commodity inflation stays in the double digits. Because of this, consumers were forced to buy in smaller quantities, which decreased the market's overall volume intake. According to figures from Nielsen, volumes decreased by 9% for the December quarter.
“At a consolidated level, we expect to deliver double-digit growth in rupee terms led by mid-single digit volume growth. The growth trends continue to improve sequentially. The quality of our profits should see improvement, led by Gross Margin recovery and continued marketing investments translating to strong double-digit EBITDA growth,” GCPL said.