FMCG Q3 Results Preview - Slow Pace Of Earnings Recovery In Staples: Motilal Oswal

In terms of volume growth, revenue growth, our fmcg universe is likely to see another subdued quarter as rural demand remains weak
<div class="paragraphs"><p>FMCG products kept on shelves inside DMart. (Source: BQ Prime)</p></div>
FMCG products kept on shelves inside DMart. (Source: BQ Prime)

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. 

Motilal Oswal Report

For the 19 consumer companies under our coverage, we expect cumulative Q3 FY23 growth of up 9.3% in topline, up 9.6% in Ebitda, and up 8.1% in profit after tax. The three-year sales/Ebitda/profit after tax compound annual growth rate is 12.9%/9.6%/7.0%, with Ebitda growth and profit after tax growth lagging sales growth because of persistent material cost pressure.

In terms of volume growth and revenue growth, our fast moving consumer goods universe is likely to see another subdued quarter in Q3 FY22, especially as rural demand remains weak.

While some categories such as biscuits and cigarettes are showing signs of demand resilience, other categories such as paints/adhesives/innerwear are showing signs of lower growth on a very high base of the past couple of years.

Going forward, weak rural sales growth from Q4 FY22 may result in optically better growth from Q4 FY23 onward, but on-the-ground rural demand is still adversely affected by inflationary pressures.

Click on the attachment to read the full report:

Motilal Oswal FMCG Q3F23 Earnings Preview.pdf


This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Get Regular Updates