Q2 Results: The Hits and Misses Of FMCG Biz FMCG companies in the second quarter witnessed mixed results; while some companies managed to post revenue growth and profit increases, others faced challenges

The second quarter of the financial year 2024-2025 saw a mixed performance from major Fast-Moving Consumer Goods (FMCG) companies. While some companies managed to post revenue growth and profit increases, others faced challenges

Nestle

Nestle India's net profit for Q2 FY25 stood at INR 899 crore, falling marginally from INR 908 crore for the corresponding quarter of the previous year. Revenue from operations for Q2FY25 was INR 5,104 crore as compared to INR 5,037 crore a year ago, a rise of 1.3 percent. Expectation for Nestle India's Earnings Before Interest, Tax, Depreciation and Amortisation stood at INR 1,293.7 crore.

Suresh Narayanan, chairman and MD, said in a statement, "Despite a challenging external environment with muted consumer demand and high commodity prices especially for coffee and cocoa, we remained resilient in our pursuit to deliver growth. This quarter, 5 of our top 12 brands grew at double-digit. However, some key brands witnessed pressure due to softer consumer demand and we focus on them and have in place robust action plans. It is heartening to note that in the last 9 months, 65 per cent of our top 12 brands including MAGGI noodles showed positive volume growth."

The company's Out-of-Home business continues to be one of its fastest growing businesses with strong double-digit growth, propelled by portfolio transformation, premiumization, new customer acquisition and driving reach beyond metros.

HUL

Hindustan Unilever Limited (HUL) announced its July- September quarter results for Q2FY25, reporting a four-per cent drop in its standalone net profit at INR 2,612 crore due to higher expenses amid a slowdown in the urban markets, compared to INR 2,717 crore in the corresponding period last year. Its total revenue from operations in the second quarter of the current fiscal rose nearly 1.5 per cent to INR 15, 508 crore, compared to INR 15,276 crore in the year-ago period.

"In the September quarter, FMCG demand witnessed moderating growth in urban markets while rural continued to recover gradually. In this context, we delivered a competitive and profitable performance. We continued executing our strategic priorities of transforming our portfolio whilst generating healthy EBITDA margin and cash flows, providing attractive returns to our shareholders," said Rohit Jawa, CEO and MD, HUL, in a statement.

"We remain watchful of a gradual recovery in consumer demand while creating a sustained competitive advantage through our business fundamentals: investing behind our aspirational brands, scaling market-making innovations and maintaining operational rigour," added Jawa.

GCPL

Godrej Consumer Products Limited (GCPL), a prominent player in the FMCG sector, recently announced its financial results for the quarter ending September 30, 2024. Despite economic pressures in India, including elevated oil costs and consumer demand challenges, GCPL has shown resilience in its growth across markets.

Reflecting on Q2 FY2025, GCPL's MD and CEO, Sudhir Sitapati said, "GCPL has had a steady quarter given the headwinds of oil costs and tough consumer demand in India. Our Standalone business grew by 7 percent in both volume and value and flat reported EBITDA." He noted that high palm oil inflation impacted EBITDA margins, currently at 24.3 percent, with additional pressure from import duties on oil. Sitapati believes this impact will be short-lived, expecting margin recovery through prudent price adjustments and cost stabilization.

"While the overall quarter was 5 percent organic UVG, 5 percent organic USG, and 8 percent reported EBITDA, the topline performance in Asia and the bottom-line performance in our international businesses have been encouraging," Sitapati added. Strong volume growth across categories like Air Care, Laundry, Incense Sticks, and Sexual Wellness has been notable, along with a positive reception for the relaunched Household Insecticides with the RNF molecule.