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  • Rural Demand Recovery to Drive FMCG Growth to 6-8% in FY26: Crisil

    Rural Demand Recovery to Drive FMCG Growth to 6-8% in FY26: Crisil

    According to Crisil ratings, the FMCG sector would mildly recover in FY26, and revenue growth is estimated to get 6-8%.

    Breakdown of News:

    • In FY24 or FY25, the FMCG sector revenue growth was slow; the main reason was that rural demand was weak. Rural people’s income growth was slow; that’s the reason their spending was compressed.
    • Crisil believes that in FY26 demand would mildly improve, especially in rural areas, because their hope is monsoon will improve or government rural-focused policies will also impact.
    • Last some quarters, the FMCG company’s revenue increased because of a price hike, not because of sales.
    • Now the expectation is we see volume-based growth; in other words, people increase their spending power.
    • If rural income increases, then consumption would also improve.
    • If commodity prices are stable, then companies would maintain their margins easily.
    • Companies should launch new products and adopt a premiumization strategy to boost their growth.

    Overall, the FMCG sector may witness a gradual recovery, but full demand recovery will only happen when the rural market strengthens. Companies will now focus on sustainable growth and margin stability.

  • Best FMCG Stocks In India 2024

    Best FMCG Stocks In India 2024

    Hindustan Unilever Ltd

    Market Cap  ₹ 606,101 Cr.

    Debt  ₹ 1,043 Cr.

    ROE  18.4 %

    Sales growth  13.2 %

    EPS  ₹ 39.0

    Industry PE  62.3

    Stock P/E  66.0

    ROCE  24.4 %

    Promoter holding  61.9 %

    Pledged percentage  0.00 %

    PEG Ratio  4.22

    Net profit  ₹ 9,183 Cr.

    Return on Equity:

    10 Years: 45%

    5 Years: 36%

    3 Years: 28%

    Last Year: 18%

    Compounded Profit Growth:

    10 Years: 13%

    5 Years: 16%

    3 Years: 13%

    TTM: 11%

    Compounded Sales Growth

    10 Years: 8%

    5 Years: 10%

    3 Years: 10%

    TTM: 13%

    PROS:

    • Company is almost debt free.
    • Company has a good return on equity (ROE) track record: 3 Years ROE 28.4%
    • Company has been maintaining a healthy dividend payout of 96.4%

    CONS:

    • Stock is trading at 12.4 times its book value
    • The company has delivered a poor sales growth of 9.60% over the past five years.
    • Promoter holding has decreased over last 3 years: -5.28%

    Procter & Gamble Hygiene and Health Care Ltd

    Market Cap  ₹ 45,860 Cr.

    Debt  ₹ 5.10 Cr.

    ROE  79.3 %

    Sales growth  9.14 %

    EPS  ₹ 177

    Industry PE  62.3

    Stock P/E  79.6

    ROCE  110 %

    Promoter holding  70.6 %

    Net profit  ₹ 576 Cr.

    PEG Ratio  14.3

    Pledged percentage  0.00 %

    Return on Equity:

    10 Years: 44%

    5 Years: 58%

    3 Years: 62%

    Last Year: 79%

    Compounded Profit Growth:

    10 Years: 12%

    5 Years: 6%

    3 Years: 11%

    TTM: -12%

    Compounded Sales Growth:

    10 Years: 12%

    5 Years: 11%

    3 Years: 10%

    TTM: 9%

    PROS:

    • Company is almost debt free.
    • Company has a good return on equity (ROE) track record: 3 Years ROE 61.7%
    • Company has been maintaining a healthy dividend payout of 109%

    CONS:

    • Stock is trading at 62.0 times its book value
    • The company has delivered a poor sales growth of 11.0% over the past five years.

     

    Colgate-Palmolive (India) Ltd

    Market Cap  ₹ 44,494 Cr.

    Debt  ₹ 83.0 Cr.

    ROE  74.4 %

    Sales growth  3.30 %

    EPS  ₹ 38.8

    Industry PE  62.3

    Stock P/E  42.0

    ROCE  92.0 %

    Promoter holding  51.0 %

    Net profit  ₹ 1,055 Cr.

    PEG Ratio  3.15

    Pledged percentage  0.00 %

    Return on Equity:

    10 Years: 65%

    5 Years: 60%

    3 Years: 67%

    Last Year: 74%

    Compounded Profit Growth:

    10 Years: 9%

    5 Years: 13%

    3 Years: 13%

    TTM: -1%

    Compounded Sales Growth:

    10 Years: 7%

    5 Years: 5%

    3 Years: 5%

    TTM: 3%

    PROS:

    • Company is almost debt free.
    • Company has a good return on equity (ROE) track record: 3 Years ROE 67.4%
    • Company has been maintaining a healthy dividend payout of 98.0%

    CONS:

    1. Stock is trading at 25.8 times its book value
    2. The company has delivered a poor sales growth of 5.07% over the past five years.

     

  • In December, there was a 10% year-on-year increase in GST collections

    In December, the Goods and Services Tax (GST) collections in India witnessed a remarkable surge, marking a substantial 10% year-on-year increase, reaching a staggering ₹1.64 lakh crore. This surge is not just a statistic; it represents a significant economic indicator and unveils the story of India’s recovery post-pandemic.

    Goods and Service Tax: All Information on Goods and Service Tax Topic - TheFinFact.com

    Understanding GST

    GST, a comprehensive indirect tax, has played a pivotal role in shaping India’s taxation landscape. Enacted to streamline the country’s complex tax structure, GST aims to simplify compliance and boost economic growth. Its significance cannot be overstated, considering its role as a key revenue generator for the government.

    Factors Contributing to Growth

    The surge in GST collections can be attributed to several factors. The economic recovery post-pandemic has fueled increased consumer spending and business activities. Government initiatives, coupled with strict enforcement to curb tax evasion, have contributed to the uptick in revenue. Additionally, businesses displaying enhanced compliance have further boosted the collections.

    Impact on Small and Medium Enterprises (SMEs)

    For small and medium enterprises (SMEs), GST compliance can be a double-edged sword. While it streamlines taxation processes, it also presents challenges. The government is cognizant of this and has implemented measures to support SMEs in navigating the complexities of the GST framework.

    Comparison with Previous Months

    Analyzing the growth trajectory over the past months reveals fascinating insights. Identifying patterns and anomalies helps in predicting future trends and understanding the dynamics influencing GST collections.

    Government’s Response

    Government officials’ statements and future plans regarding GST collections are critical to understanding the strategic direction. Transparent communication ensures stakeholders are well-informed.

    Expert Opinions

    Insights from economists and financial analysts deepen our understanding of the implications of increased GST collections on broader economic indicators.

    Quick Review:

    1. What contributed to the significant increase in GST collections?                      The increase in GST collections can be attributed to factors such as economic recovery, government initiatives, and improved business compliance.

    2. How does GST impact small and medium enterprises (SMEs)?                        GST streamlines taxation for SMEs but presents challenges. The government has implemented measures to support them in navigating the complexities.

    3. Are there challenges hindering optimal GST collection?                                    Yes, challenges like tax evasion, delayed payments, and procedural complexities persist. The government is actively working on strategies to address these issues.

    4. What is the government’s response to the surge in GST collections?      Government officials have acknowledged the success and outlined future plans to optimize GST collections, ensuring transparency.

    For detail study click here

     

  • Adani Group Considers Exiting FMCG Joint Venture with Wilmar

    In a significant development in the fast-paced world of business, the Adani Group is reportedly exploring the possibility of exiting its long-standing joint venture (JV) in the Fast-Moving Consumer Goods (FMCG) sector with Wilmar.

    Why the Consideration to Exit?

    Market Dynamics at Play

    One of the primary factors contributing to Adani Group’s consideration to exit is the ever-evolving market dynamics. The FMCG industry is known for its sensitivity to market trends, and Adani may be responding strategically to these shifts.

    Strategic Reevaluation

    Companies often reassess their strategies to ensure alignment with their core competencies and long-term goals. Adani’s potential exit could be a result of a strategic shift, realigning the group’s focus and resources.

    Quick Review:

    Q1: Why is Adani Group considering an exit from the FMCG joint venture with Wilmar?

    Adani Group’s potential exit is driven by a combination of factors, including market dynamics, strategic shifts, and a reevaluation of their business priorities. The FMCG industry is highly dynamic, and companies often reassess their strategies to stay aligned with evolving market trends.

    Q2: How might the exit impact the Adani Group and Wilmar?

    The exit could have profound effects on both Adani and Wilmar. It may influence their market standing, financial portfolios, and overall brand image. The specific impact will depend on the terms of the exit and the strategies each company adopts in response.

    Q3: What challenges could Adani and Wilmar face post-exit?

    Post-exit challenges could include navigating uncertainties in the market, redefining strategies to fill the void left by the exit, and ensuring a smooth transition. Maintaining brand integrity and sustaining customer trust are also critical considerations.

     

     

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