BOA-ML FMCG Sales Reach Another Record High In all market conditions just two sectors Outperform-FMCG and Pharma Total sales growth came in at 14% - highest in last eight months. Volume growth acceleration across most categories is the trigger for this sharp pick-up in growth. This is against the run of play, given food inflation is still high and it is too early for the normal monsoon outlook to make an impact.
We would wait and watch how the trend moves over the next couple of months. We maintain our view of a strong recovery in growth in 2HCY10, led by price hikes, higher volume growth as food inflation subsides, and a normal monsoonsupporting rural growth.
HUL - Sales grwth turns positive as volume growth picks up
HUL saw sales growth of ~4% after four months of decline. Pick up in volume growth was the key driver. Barring Tea & Coffee, all other categories had positive growth. Detergents continue to do well with 24% volume growth. This reflected in value growth as well, with an across-the-board improvement, as only Coffee is still witnessing decline. We await sustainability of this trend before revisiting our view.
HUL – Market share trend still a mixed bag
Though sales growth picked up for HUL, it failed to beat market growth, as market shares did not show much improvement. Declines were seen in Soaps, Laundry and Toothpaste, with slight gains in Skin Care. However, gains in Shampoos, Tea, Coffee and Ketchups were healthy. On a long-term basis though, market shares are still lower across most categories vs. their last year levels. Unless HUL consistently outperforms market growth, a sustained market share gain is difficult. Nestle – sales growth steady with market share gains Sales growth revived to 14% in April. Market shares went up for Noodles, Ketchups and Chocolates, with Coffee continuing its steep decline. However, the trend over the last year has been the reverse, with only coffee recording gains. Colgate – Sales growth up strongly with market share gains Mar. sales grew 13%, one of the highest over last 18 months. Market shares went up across all three key categories of Toothpaste, Toothbrush and Toothpowder. Colgate has done well, with 140bp margin gains in Toothpaste and Toothpowder over the last one year, driven by expansion of rural reach and low-price SKUs. Dabur – Sales growth remains weak; Market shares mixed Despite recovery, sales growth remained weak at 8%. Market shares were largely neg, with losses in Shampoos, Toothpowder and Chyawanprash, and gain in Toothpaste. Overall trend over the last one year has been positive, with share g ains in Toothpaste, Toothpowder and Chyawanprash, and losses in Shampoos. Safe Harbor Statement: Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints. Nothing in this article is, or should be construed as, investment advice. |
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