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Nirmal Bang Report
Early commentaries from some of the fast moving consumer players like Marico Ltd., Dabur India Ltd., and Godrej Consumer Products Ltd. suggest that the overall demand environment remains subdued.
On rural demand, we believe that the overall recovery is not that sharp and is not broadbased across categories.
Q3 FY24 is likely to witness significant YoY gross margin expansion for several fmcg companies due to soft raw material prices but rising adspends (off a low base), modest realisation growth versus preceding quarters and persistently tepid volume growth mean that Ebitda margin is likely to remain flat with absolute Ebitda growing in-line with revenue.
As highlighted in our commodity cost note released recently, some raw material prices (especially food related) remain elevated.
We are expecting our FMCG coverage universe to clock revenue growth of 5.2% YoY.
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