After enduring a tough year due to headwinds such as impact of demonetization particularly in rural markets, the FMCG industry expects growth to return in 2017-18, said homegrown major Godrej Consumer Products Ltd, according to a PTI report.
“Our expectation is that the fiscal year 2017-18 should see the return of growth in the FMCG sector,” Godrej Consumer Products Ltd (GCPL) Managing Director Vivek Gambhir told news agency PTI.
He further said: “We are hopeful that consumer demand will increase gradually, supported by a pro-growth budget with adequate government stimuli and additional investments that lead to more job creation.”
However, GCPL which also witnessed disruptions in October-December quarter on account of demonetization, may have an impact on its overall FY2016-17 results although it is witnessing current quarter to be better than the previous one.
“If demonetization had not happened, we would have seen a much stronger quarter three and a much stronger quarter four. So to that extent, our annual results for the whole year will be softer than what we would have liked to see, at least based on the October momentum that we were seeing in the business,” he was quoted by PTI as saying.
Last week, GCPL had reported 4.34 per cent fall in third quarter consolidated profit to Rs 351.78 crore. However, its income was up 8.75 per cent at Rs 2,485.77 crore.
“The recovery has been better than we expected and we ended Q3 with about 2 per cent secondary sales growth. The business has picked up at a faster pace than we had anticipated and we are quite hopeful that things will return to normal in the next couple of months,” Gambhir told PTI.
Over the ongoing quarter, he was quoted by PTI as saying: “Our expectation is that quarter four should be better than quarter three both in terms of topline and profit growth. Our efforts will be to grow profits either in line or slightly ahead of sales growth.
Besides, GCPL which had 28 per cent of its revenue from global markets last quarter, is open to explore and invest in ASEAN markets. “We are open to investing in markets like Myanmar, Vietnam and markets in the ASEAN region but so far the focus is only on Myanmar,” Gambhir told PTI.
He further said: “We do have some organic focus in Myanmar and have a small team on ground. Goodknight is being sold in the Myanmar market but these are still early days.”
The company is building its presence in three emerging markets Asia, Africa, Latin America in three categories – home care, personal wash and hair care.