FMCG, Alco Bev Q3 Results Preview - Unchanged Demand Trend, Some Respite In Margins: HDFC Securities

HDFC Securities Institutional Equities

Our fast moving consumer goods coverage universe is expected to deliver growth of 9/11% on YoY/three-year compound annual growth rate in revenue in Q3 FY23 (versus 17/10% in Q3 FY22 and 8/11% in Q2 FY23).

Rural demand remained tepid while some green shoots were visible at the end of the quarter. Urban demand too was not different from that seen in Q2. Thus, we do not expect volume CAGRs of companies to show any meaningful difference from those in Q2.

Packaged food is expected to sustain strong growth, primarily led by price hike (volume side should be similar). Winter portfolio could not see enough pick-up due to a delayed winter; skin care portfolio, hence, could see some pressure.

Other discretionary consumption like quick service restaurant was also weak (particularly after the festive season). Cigarette is sustaining a similar CAGR; reported numbers will still be better than underlying. Most international geographies (excluding Indonesia) continued their growth momentum.

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More Research Reports On FMCG Q3 FY23 Earnings Preview

• Demand Slowdown Will Weigh On Topline: Axis Securities

• Inflationary Pressures Easing; Rural Yet To Pick Up Pace: Nirmal Bang

• Slow Pace Of Earnings Recovery In Staples: Motilal Oswal

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