FMCGs grapple with cost inflation in Q2, brace for margin pressure in H2
FMCG companies face sustained margin pressure in the second half of the current fiscal year as rising input costs squeeze profitability, with firms weighing post-Diwali price hikes against the risk of hurting consumer demand, particularly in price-sensitive mass-market and rural categories.
Input-cost pressures intensified in the September quarter, reversing some of the moderation seen in the preceding quarter, which squeezed margins even as companies absorbed part of it to protect consumer demand during the festive season.
The increase has been uneven across commodities, with crude-linked derivatives, packaging materials, palm oil and sugar emerging as key pressure points, said Naveen Malpani, Partner and Consumer Industry Leader at Grant Thornton Bharat.
"In rupee terms, palm oil prices were approximately 21 per cent higher year-on-year in September, while sugar prices remained around 18 per cent higher year-on-year despite correcting 8 per cent month-on-month," he said.
Higher .
5News aggregated this summary from the outlet’s public feed. The full article, with all the context, is on www.business-standard.com — the content belongs to Business Standard.
