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Monsoon, GDP Perk Up Sentiment: The Financial Express
Delhi, Sept 30: A good monsoon this year has brought cheers to the growth-starved fast-moving consumer goods (FMCG) sector. Thanks to the economic growth indicators looking up, the FMCG sector is expected to post a growth rate of 5-10 per cent for the next six months ending March 31, 2004. The growth of this sector had slowed down in the last 2-3 years on account of a drought-like situation and a general slowdown in the economy.
Delhi, Sept 30: A good monsoon this year has brought cheers to the growth-starved fast-moving consumer goods (FMCG) sector. Thanks to the economic growth indicators looking up, the FMCG sector is expected to post a growth rate of 5-10 per cent for the next six months ending March 31, 2004. The growth of this sector had slowed down in the last 2-3 years on account of a drought-like situation and a general slowdown in the economy.
Hindustan Lever Ltd (HLL) chairman MS Banga told FE: “The mood in the economy is positive, and it is not just a flash in the pan.”
“There is certainly a feel-good factor in the FMCG industry. However, it will translate into better growth rates only December onwards. The general feel-good factor, good monsoon and expected high rate of GDP growth are the main reasons for the feel-good factor in the FMCG industry,” said Godrej group chairman Adi Godrej.
Marico Industries chairman and managing director Harsh C Mariwala said, on the softer side, the monsoon has been quite good and appears even better on the background of last year’s drought.
Concurring on the view, Ashok Chhabra, executive director, Procter & Gamble India, said: “We expect this year’s better-than-expected monsoon to boost the economy as a robust harvest should push up rural incomes and drive demand for FMCG.”
“Monsoon is the lifeline of the Indian economy as the agricultural sector accounts for 25 per cent of GDP and employs about seven of every 10 people in a country of more than a billion people. An NCAER study indicates 60 per cent of demand for consumer non-durables comes from rural areas,” reasoned Mr Chhabra.
Growth in all segments of the Rs 80,000-crore FMCG industry is expected to accelerate, along with a considerable improvement in consumer spending, especially in rural India. Segments like soaps, toothpaste and other personal care products, along with beverages, are expected to perform well.
Industry analysts, however, differ about the exact time when the positive outcome will be visible in the FMCG sector. A fund manager from a public sector mutual fund said that guided by rural demand, there can be a pick-up in the December quarter. He is optimistic about the performances of HLL, ITC and Nestle.
Analysts said FMCG behemoth HLL is expected to post a topline growth in excess of five per cent for the September quarter over the same quarter last year. The company had reported a topline growth of 3.02 per cent to Rs 2,693.42 crore in the June quarter. However, a clear picture of the company’s performance would emerge in the December quarter.
Tridib Pathak, equity fund manager at Principal Mutual Fund, felt that the results of the good monsoon will be visible only in the next financial year. SBI MF equity fund manager Sandip Sabharwal said that an upturn is expected in the December quarter, adding that things have started to look up in the last three months as is evident from a rise in stock prices.
“There is certainly a feel-good factor in the FMCG industry. However, it will translate into better growth rates only December onwards. The general feel-good factor, good monsoon and expected high rate of GDP growth are the main reasons for the feel-good factor in the FMCG industry,” said Godrej group chairman Adi Godrej.
Marico Industries chairman and managing director Harsh C Mariwala said, on the softer side, the monsoon has been quite good and appears even better on the background of last year’s drought.
Concurring on the view, Ashok Chhabra, executive director, Procter & Gamble India, said: “We expect this year’s better-than-expected monsoon to boost the economy as a robust harvest should push up rural incomes and drive demand for FMCG.”
“Monsoon is the lifeline of the Indian economy as the agricultural sector accounts for 25 per cent of GDP and employs about seven of every 10 people in a country of more than a billion people. An NCAER study indicates 60 per cent of demand for consumer non-durables comes from rural areas,” reasoned Mr Chhabra.
Growth in all segments of the Rs 80,000-crore FMCG industry is expected to accelerate, along with a considerable improvement in consumer spending, especially in rural India. Segments like soaps, toothpaste and other personal care products, along with beverages, are expected to perform well.
Industry analysts, however, differ about the exact time when the positive outcome will be visible in the FMCG sector. A fund manager from a public sector mutual fund said that guided by rural demand, there can be a pick-up in the December quarter. He is optimistic about the performances of HLL, ITC and Nestle.
Analysts said FMCG behemoth HLL is expected to post a topline growth in excess of five per cent for the September quarter over the same quarter last year. The company had reported a topline growth of 3.02 per cent to Rs 2,693.42 crore in the June quarter. However, a clear picture of the company’s performance would emerge in the December quarter.
Tridib Pathak, equity fund manager at Principal Mutual Fund, felt that the results of the good monsoon will be visible only in the next financial year. SBI MF equity fund manager Sandip Sabharwal said that an upturn is expected in the December quarter, adding that things have started to look up in the last three months as is evident from a rise in stock prices.