Fourth Quarter Earnings Watch: Slowing Demand Makes FMCG’s ‘Fast Move’ Commitment Tested
Moderate consumer demand continued to grow revenues in the March quarter for Fast Mobile Consumer Goods (FMCG) companies, expanding shorter first-class expansion. However, behind this bland revenue performance, cost control measures emerge as a key buffer, stabilizing profits and preventing deeper erosion.
one Mint Analysis of 19 FMCG companies showed that in the fourth quarter, the total revenue volume of year-on-year revenue was still at a 6.1% stagnation, slightly lowering from 6.6% in the first quarter of the December quarter. In stark contrast, net profit soared sharply from 12.1% year-on-year growth of Q3FY25 to 31% of FY25 in the fourth quarter, highlighting the widening differences between these key performance indicators.
The analysis is based on independent data from the Capitaline database and companies that have released their latest financial results to date.
FMCG has remained silent for five consecutive quarters of revenue growth, reflecting the ongoing slowdown in demand, which continues to perform at the highest performance across the industry. Instead, net profits rose steadily during the same period unless they fell in the September quarter of FY25. This divergence puts pressure: Net profit margins in the third quarter fell from 13.7% in the third quarter to 12.8% in the fourth quarter, but are improving compared with the same period last year.
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Amid the fiscal year’s total expense contraction in the second half of the fiscal year, efforts to protect profitability were evident, with an increase of nearly 9% in the first half.
However, despite the stable overall inflation rate, the input price of basic commodities rises. Raw materials costs accounted for a portion of net sales, rising to 28.5% in the fourth quarter, up from 27.3% in the third quarter and 27.7% a year ago. Most companies appear to be transferring these higher costs to consumers, with further prices expected to support revenue growth.
A Nielseniq report highlighted this trend, showing an 11% year-on-year value increase in the FMCG sector in the March quarter, driven by a 5.1% batch growth and a 5.6% price increase.
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Despite this, the company’s analysis showed different performances. While seven of the 16 profitable companies narrowed their net profits in the fourth quarter, five of which posted double-digit declines, strong growth at the other eight helped offset those losses.
It is worth noting that companies reporting the highest net profits, such as VST Industries, GM Breweries and Dabur India, also saw revenue declines in the March quarter, suggesting a link between Topline challenges for some players and bottom-line performance.
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This is the tenth part of a series of data stories about the ongoing fourth-quarter earnings season. Read the previous section of our earnings series here.
