In what could probably be an indicator that the fast moving consumer goods (FMCG) industry is on the brink of a turnaround, the much awaited lag effect of the monsoon is finally being witnessed by certain companies. Godrej Consumer Products Ltd (GCPL) — a prominent player in the sector — has witnessed a 15 per cent growth across its businesses in the month of February as compared to the same month last year. These estimates are as per its internal estimates.
“We see a growth of 15 per cent in toilet soaps and across other categories for February this year over the same month last year. We believe that this growth is due to the monsoon effect,” said GCPL executive director and president HK Press.
The growth is expected to get reflected in the company’s overall performance for the fourth quarter ended March 31, 2004. GCPL reported a net profit of Rs 17.94 crore in the third quarter ended December 31, 2003, on net sales of Rs 128.26 crore.
Industry analysts pointed out that the sharp rise in growth for GCPL in February could be on account of the price increase that the company undertook in January this year. Prices of toilet soaps were hiked on the back of rising raw material prices.
Mr Press said that the spurt in growth would also hold true for the toilet soaps industry in general.
However, leading FMCG company Hindustan Lever Ltd (HLL) refused to comment on the growth numbers for February.
HLL had reported a net profit of Rs 494.72 crore on net sales of Rs 2,583.48 crore in the fourth quarter ended December 31, 2003.
Among other FMCG companies, Procter & Gamble Hygiene and Health Care (P&G) reported a net profit of Rs 39.32 crore in the December quarter, on net sales of Rs 167.25 crore, while oral care major Colgate-Palmolive (India) Ltd reported a net profit of Rs 27.45 crore on net sales of Rs 279.2 crore.
The FMCG industry had seen slackening of growth over the last few years. The bulk of the slowdown was due to the economic downturn and slow rural growth. Mature categories such as toilet soaps had suffered a degrowth due to the phenomena of downtrading by consumers.