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Double Whammy Inflation hitting FMCG sector with low sales
19 May '08
3 min read
Mr. Dhoot added, “despite a 15.7 per cent growth in its total income, HUL reported a decline of 39.41 per cent in its net profit after tax in the fourth quarter as compared to Q3 of the FY 2007-08”.
Rising wage costs have also hit the bottom line of the FMCG companies. Net profit margins of Marico and Dabur India ltd recorded a decline of –11.1 per cent and –5.55 per cent on sequential quarter basis owing to the rise in their wage costs by 18.29 per cent and 48.71 per cent respectively.
The intense competition in FMCG sector makes advertising as an important expense. Godrej Consumer Products Ltd. (GPCL) has registered a 23.26 per cent increase in the advertising and sales promotion activities on sequential quarter basis.
With the increasing input costs and advertising expenses, the company registered a decline of 5.11 per cent in its net earnings.
Rising wage costs have also hit the bottom line of the FMCG companies. Net profit margins of Marico and Dabur India ltd recorded a decline of –11.1 per cent and –5.55 per cent on sequential quarter basis owing to the rise in their wage costs by 18.29 per cent and 48.71 per cent respectively.
The intense competition in FMCG sector makes advertising as an important expense. Godrej Consumer Products Ltd. (GPCL) has registered a 23.26 per cent increase in the advertising and sales promotion activities on sequential quarter basis.
With the increasing input costs and advertising expenses, the company registered a decline of 5.11 per cent in its net earnings.
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