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Informist, Saturday, Jul. 19, 2025

 

By Gopika Balasubramanium

 

MUMBAI – The June quarter is likely to have been sombre for companies in the consumer goods sector--consumer staples, consumer durables, and jewellery--that are part of the Nifty 200 index. The cumulative net profit of these companies for the quarter is likely to rise only in name, though the sales growth is likely to be robust across the board, according to brokerages tracking the sector.

 

The performance of fast-moving consumer goods companies in the June quarter is expected to be dismal--hit by a shortened summer, low volumes, and poor demand. However, some companies are likely to fare better because of pricing-led growth. The performance of consumer durable companies is likely to have been worse as demand for summer-centric products plunged due to the early onset of the southwest monsoon. Steady growth in some segments such as wires and cables and lighting is likely to have been the saving grace for this sector.

 

The aggregate net profit for the June quarter of 17 consumer sector companies is seen to have risen only 2% on year to INR 147.40 billion. Sequentially, the aggregate net profit is expected to have risen nearly 3%. Jewellers are likely to have fared better, and their net profit is likely to see a significant rise, which will help to partly offset the muted rise in net profit of other consumer goods companies.

 

Estimates showed the top line of these 17 companies will grow around 13% on year to INR 1.218 trillion. This is mainly due to double-digit growth in sales of jewellery-makers, as demand for jewellery remained healthy due to the wedding season, Antique Stock Broking said. While FMCG companies showed mixed performance on this metric, growth in the top line of consumer durable companies was significantly higher. Sequentially, the cumulative net sales of these companies likely grew 4% in the June quarter. 

 

SLOW-MOVING FMCG

FMCG companies are expected to report poor earnings growth in the June quarter as there was little sequential improvement in urban demand. However, demand in rural areas continued to recover. "Interestingly, while urban is struggling, rural demand is picking up thanks to improved agricultural prospects and early sowing conditions," Nuvama Institutional Securities said. 

 

While the first quarter of the financial year typically benefits from the summer season, the early onset of rains was a setback for these companies. The southwest monsoon hit the coast of Kerala on May 24, eight days ahead of its normal onset on Jun. 1. This was the earliest onset of the monsoon since 2009, according to the weather bureau. 

 

The 10 FMCG companies along with two alcoholic beverage-makers and two jewellers in the Nifty 200 will likely see a rise of nearly 3% on year in their net profit for the June quarter. This moderate growth is because the profits of six of these 14 companies are likely to have declined on year. Sequentially, the net profit is seen rising over 5% for these 14 companies put together. These companies will likely see a moderate rise of over 9% on year in their aggregate sales. Sequentially, the sales is seen rising a mere 4%.

 

Kalyan Jewellers India, Titan Co., and Tata Consumer Products are seen as the outperformers as they are likely to report double-digit on-year growth in both net profit and sales. Jewellery-makers are likely to have done better despite the surge in gold prices. Kalyan Jewellers' sales are expected to have risen 28% on year and its net profit is seen rising almost 31%. Titan's sales likely grew nearly 18% on year and its net profit grew over 20% from a year ago.

 

Surge in volumes of domestic tea, foods business, and salts, along with price hikes, is expected to have helped Tata Consumer to report strong earnings for the quarter, brokerages said. The company's revenue from operations is seen up over 11% on year and its net profit likely grew around 17% on year.

 

Colgate Palmolive (India) will likely see a decline in both metrics. The company's oral care business likely saw lower volumes as consumers down-traded to smaller packs while advertising expenses remained high. The toothpaste-maker's sales are likely to have declined 1% on year. Its net profit is expected to have fallen at a faster pace of 5%.

 

Unseasonal rains and the shortened summer also hit the sales of several FMCG categories such as beverages, glucose, cooling oils, and talcum powders. A few companies are expected to have benefited from pricing-led growth, particularly in essentials such as tea, biscuits, and oils, while others are likely to have come under pressure from weak summer sales and increased competition in oral care, Elara Securities said. Higher input costs are likely to weigh on margins, with most companies expected to report a contraction in their net profit, the brokerage said.

 

Tata Consumer, United Breweries, and Varun Beverages were likely to have been the most affected. Soft drinks sales and sales of single-serve packs were particularly badly hit. Out-of-home sales--products sold through kirana stores and quick commerce platforms--such as soft drinks and ready-to-eat snacks also faced sluggish sales due to reduced footfalls and reduced impulse buying.

 

Demand for hygiene and personal care products is seen to have remained largely mixed. Demand for detergents was steady while demand for hair oils, fairness creams, and deodorants continued to face pressure, Prabhudas Lilladher said in a report. Volumes in the oral care segment also moderated in the June quarter. Colgate Palmolive continues to face intense competition in this segment. Biscuits and bakery products have seen strong demand despite recent price hikes, the brokerage said. 

 

Prices of raw materials used by consumer staple companies softened during the quarter. Costs of commodities such as tea, coffee, and palm oil were high in the past few quarters but have fallen since. For example, palm oil prices have fallen 13% on quarter, a positive for FMCG companies, Nuvama said. However, companies could not benefit from this because of a pile-up of higher-cost inventories. Most brokerages expect these companies to reap the benefit of falling raw material prices from the September quarter. 

 

"Volume growth is likely to be similar to that in Q4 (Jan-Mar), with select players seeing moderate improvement and some facing volume pressure," Emkay Global Financial Services said in its report. Increased spending on promotional and advertising activities are likely to have impacted the margins of consumer staple companies. The on-year growth of household insecticides volumes is expected to be in the mid-to-high single digit, sharply lower than the mid-teen growth seen in the March quarter, the brokerage said.     

 

CONSUMER DURABLES

Abnormal rains in May and June also affected the consumer durable companies and have taken a toll of the sales of cooling products categories. Sales of air coolers, room air conditioners, refrigerators, and fans were weak during the quarter due to the unexpected weather changes and also due to a high base, brokerages said.

 

The consumer durables companies--Voltas, Havells India, and Dixon Technologies (India)--are expected to see a 4% on-year decline in their cumulative net profit. Sequentially, these companies are likely to see a 28?ll in cumulative net profit. This is mainly due to the likely decline of 44% on year in the net profit of Dixon Technologies and a 27?ll in the net profit of Havells India.

 

These three consumer durables companies are likely to cumulatively see a 29% on-year rise in their sales, however, mainly on account of an 83% rise in sales of Dixon Technologies led by a ramp-up of mobile volumes. However, sales of Voltas likely declined 11% on year as the early onset of the monsoon hit demand for its core unitary cooling products. Revenue from operations of Havells are likely to have risen only 2% on year. On a quarter-on-quarter basis, the net sales of the three companies likely rose 4%.

 

Sales of the room air-conditioner industry is estimated to have declined 25% on year in the June quarter also on account of a high base, Nirmal Bang Equities said. The disrupted summer and aggressive channel stocking in the previous quarter in anticipation of a strong summer also led to a fall in volumes of room air conditioners, Kotak Securities said. For Voltas, the brokerage expects revenue from its unitary cooling products segment to decline 16%.

 

The wire and cables segment likely did better with the rise in domestic volume growth, which partly offset lower pricing and weak exports, Kotak Securities said. Demand for wires, which was weak initially, picked up over the course of the quarter.

 

"Our discussion with channel partners suggests that due to the increase in commodity prices, industry players have increased prices by 2-3% in May '25 and that high prices have led to the restocking of materials," Motilal Oswal Financial Services said. "Strong execution of government-led projects (power, infrastructure), steady demand from real estate projects, and a pickup in exports should drive robust growth during the quarter." Havells India is likely to have benefited from an improvement in demand for wires and cables, aided by a ramp-up at its facility in Tumkur, Karnataka. 

 

Following are the Apr-Jun earnings estimates for consumer companies that are part of the Nifty 200 index, based on reports from 14 broking firms: 

 

Company name	Sales (INR million)	PAT (INR million)	Sales YoY Change %	PAT YoY Change %	Sales QoQ Change %	PAT QoQ Change %	No of estimates available
Britannia Industries +	46,110.7	5,717.5	8.5	13.1	4.0	2.1	12
Colgate Palmolive (India)	14,757.1	3,455.3	(-)1.3	(-)5.1	1.0	(-)2.7	12
Dabur India +	34,151.2	4,915.9	2.0	(-)1.7	20.7	53.6	14
Dixon Technologies (India) +	120,556.1	2,223.2	83.2	66.3	17.1	(-)44.5	10
Godrej Consumer Products +	36,372.5	4,856.9	9.2	7.8	1.1	17.9	12
Havells India	59,421.4	3,832.4	2.5	(-)6.8	(-)9.0	(-)26.6	11
Hindustan Unilever	159,079.1	25,521.6	3.7	0.6	4.6	2.4	12
ITC	179,204.3	49,834.6	5.4	1.3	3.9	2.2	12
Kalyan Jewellers India +	70,772.0	2,324.0	27.9	30.7	14.5	23.9	1
Marico +	32,114.7	4,891.4	21.5	5.4	17.6	42.6	13
Nestle India	50,958.4	7,395.6	5.9	(-)0.9	(-)7.4	(-)16.5	12
Patanjali Foods	82,936.5	2,445.0	15.6	(-)7.0	(-)14.4	(-)31.8	2
Tata Consumer Products+	48,429.2	3,389.7	11.3	16.8	5.1	(-)1.7	9
Titan Co.	142,030.6	9,279.4	17.8	20.5	5.4	6.7	10
United Spirits	24,909.1	2,899.6	5.9	(-)3.0	(-)15.4	(-)35.7	8
Varun Beverages +	72,255.0	12,040.3	0.4	(-)3.9	29.8	65.7	8
Voltas	43,708.4	2,380.5	(-)11.2	(-)28.8	(-)8.3	(-)1.2	12
Total	1,217,766.3	147,402.7	12.6	2.2	4.0	2.8	N.A

 

Notes:

+ Consolidated Figure
Y-o-Y: Year-on-Year
Q-o-Q: Quarter-on-Quarter
N.A.: Not Available
 
Estimates from:

Anand Rathi Share and Stock Brokers Ltd., Antique Stock Broking Ltd., Centrum Broking Ltd., Dolat Capital Market Pvt. Ltd., Elara Securities (India) Pvt. Ltd., Emkay Global Financial Services Ltd., HDFC Securities Ltd., HSBC Global Research, ICICI Securities Ltd., IIFL Capital Services Ltd., JM Financial Institutional Securities Pvt. Ltd., Kotak Institutional Equities, Motilal Oswal Financial Services Ltd., Nirmal Bang Equities Pvt. Ltd., Nomura Equity Research, Nuvama Wealth Management Ltd., Prabhudas Lilladher Pvt. Ltd., Sharekhan Ltd., Systematix Shares and Stocks (India) Ltd., and YES Securities (India) Ltd.   End

 

US$1 = INR 86.14

Compiled by Shivaji Jagatap

Edited by Rajeev Pai

 

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