Q1 results preview: FMCG sector may see improving volume and value growth trends amid demand recovery

Q1 results preview: The fast-moving user goods (FMCG) companies are witnessing a gradual betterment successful request aft a anemic base. These players are expected to spot a stable-to-improving maturation trajectory successful the archetypal 4th of FY25.

Within user discretionary companies, the cigarettes, alcobev and jewelry segments are expected to spot resilience portion request challenges whitethorn prevail successful QSR, paints and footwear segments.

Kotak Institutional Equities anticipates Q1 results of astir FMCG companies to spot stable-to-improving measurement and worth maturation trends.

However, Hindustan Unilever (HUL) is expected to study level revenues with wide underwhelming show connected an implicit and comparative basis, according to Kotak Equities.

The brokerage expects an improving maturation inclination from Marico and Britannia Industries and a mixed container show from Godrej Consumer Products and Tata Consumer Products.

Here’s a look astatine Q1 results preview of apical FMCG companies:

In the FMCG segment, ITC is estimation to study 7% YoY gross maturation with nary large sequential terms adjustments, on with 10 bps YoY enlargement successful EBIT borderline to 8.4%. ITC’s hotels conception is expected to spot 8-9% maturation and 250 bps YoY enlargement successful EBIT borderline to 24.5%, the brokerage estimates show.

Kotak Equities exemplary marginal ~15 bps QoQ (+210 bps YoY) enlargement successful gross borderline to 52%. It estimation 23.3% EBITDA margin, up 20 bps YoY arsenic gross borderline gains connected YoY ground are offset by 25 bps effectual summation successful royalty, summation successful A&P strength to 10.5% of income continuing with its intent to support SOV > SOM, 40-50 bps interaction of discontinuation of organisation of OTC products of GSK CH, and adverse operating leverage connected fixed expenses.

EBITDA borderline is expected astatine 23.7%, up 95 bps YoY but down 175 bps QoQ, portion EBITDA is apt to turn 14.7% YoY.

Biscuit volumes are expected to emergence 7.5%. Consolidated gross borderline is apt to declaration ~65 bps sequentially to 44.3% arsenic terms cuts and higher grammage offsets the interaction of brushed earthy worldly prices.

Consolidated EBITDA borderline successful Q1FY25 whitethorn grow 30 bps YoY to 19.6% arsenic gross borderline is partially offset by summation successful A&P spends, resulting successful EBITDA maturation of 7.9%.

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