| Growth in consumer spends and value generated by price hikes are expected to deliver steady growth for fast moving consumer goods (FMCG) companies in the quarter ended March, 2008. |
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| The year-on-year average growth in the operating profit growth could be around 18 per cent on a net sales growth about 15 per cent while the net profit is expected to be about 20 per cent. |
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| The better performers in the FMCG space could be Nestle and Godrej Consumer: the former is expected to post the highest growth in net sales over around 17 cent whiel the latter Godrej is expected to post the highest growth in net profit at 40 per cent. Both these firms should benefit from margin expansion resulting from price hikes taken by them to offset cost increases. |
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ITC may well post a decline in volumes growth due to the recent excise duty hike on non-filter cigarettes. However, together with the FMCG and other businesses, ITC should turn in a growth in net sales of over 11 per cent and growth in operating profit of close to 18 per cent.
(Rs crore)
Company | Net sales | Operating profit | Profit after tax | | Q4FY08 E | Q4FY07 | Change % | Q4FY08 E | Q4FY07 | Change % | Q4FY08 E | Q4FY07 | Change % | | ITC | 3,867 | 3,466 | 11.6 | 1,095 | 930 | 17.7 | 753 | 650 | 15.8 | | HUL | 3,627 | 3,184 | 13.9 | 446 | 362 | 23.5 | 397 | 333 | 19.2 | | Nestle | 1,054 | 899 | 17.2 | 220 | 178 | 23.2 | 139 | 111 | 25.4 | | Dabur | 480 | 444 | 8.0 | 86 | 73 | 18.0 | 75 | 65 | 15.0 | | Marico | 359 | 335 | 13.0 | 42 | 38 | 12.0 | 30 | 27 | 11.0 | | Tata Tea | 287 | 251 | 19.0 | 18 | 15 | 26.2 | 11 | 2 | 636.3 | | GCPL | 210 | 186 | 12.9 | 39 | 32 | 21.2 | 35 | 25 | 40.6 | |
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| Price hikes taken in the detergent category and growth in personal care products business could help Hindustan Unilever deliver a growth in net sales of about 14 per cent and an operating profit growth of about 24 per cent. |
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| Other companies which are expected to witness strong growth in earnings are Dabur, Marico and Tata Tea. However, Dabur's expected net sales growth of 8 per cent and operating profit growth of 18 per cent would be primarily volume-driven as it has not taken any price increase in this quarter. |
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| Marico should deliver a revenue growth of 13 per cent and an operating profit growth of 12 per cent, enabled by the growth in sales of its functional foods and hair care brand Parachute. |
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| For Tata Tea, the impact of profit from Glaceau stake sale could cause a jump of over 600 per cent in net profit. However, its operating profit due to better domestic performance could grow by 26 per cent and net sales are expected to grow by about 19 per cent. |
