FMCG on steady track in Q1

FMCG companies found the going good in the June'06 quarter. This is the fifth consecutive quarter in which industry sales growth has been above 10%. Operating profit margins, however, are showing signs of being under pressure.

e4m by exchange4media Staff
Published: Aug 5, 2006 7:58 AM  | 3 min read
FMCG on steady track in Q1

FMCG companies found the going good in the June'06 quarter. This is the fifth consecutive quarter in which industry sales growth has been above 10%. Operating profit margins, however, are showing signs of being under pressure.

Companies have been hiking product prices to offset higher input costs, while tax benefits accruing to companies with units in tax-exempt locations continue to provide a buffer. Aggregate results of 12 FMCG companies with sales of Rs 9,231 crore, show sales rose 16% in the June '06 quarter, while profit increased by 16.6% to Rs 1,415 crore.

The fact that tax benefits are helping profit growth is evident from PBT growing by only 13.6% during the quarter. Going forward, as far as sales growth is concerned, high growth in the second half of FY06 makes it a tough task to replicate growth in the second half of the current fiscal.

Thus, there may be some slowdown in growth in the second half though full year growth will still be robust. ITC and HLL, the two largest companies, did well, with HLL's sales growing more sedately during the quarter with a 8.7% growth in sales. ITC, in contrast, reported sales growth of 26% and profit growth of 16.8%.

HLL's profit growth was higher at 35.1% (25% at the PBT level). HLL benefited from good growth in its home and personal care businesses, while sales of beverages declined during the quarter. ITC benefited from good growth in its cigarettes business, and also from its other divisions of FMCG, agri-business, paper, and hotels.

Among the mid-sized companies, Colgate-Palmolive (India), Marico Industries, Britannia Industries did quite well, with high sales growth. Godrej Consumer Products did well too, with brand sales up by 19% but headline numbers were lower due to the contract manufacturing business not yielding revenues.

On a consolidated basis, its performance was even better, with sales up 42% and profit up by 21%, aided in part by acquisitions. The trends in expenditure show a steady increase in raw material cost to sales, which has been a constant worry for FMCG companies.

Key petro-based intermediates used in personal and home-care products have become expensive, due to rising crude prices. FMCG companies have also been utilising the savings in excise and income tax on higher advertising. In the June '06 quarter, advertising and marketing expenses grew 20.7% to Rs 568 crore.

Advertising as a percentage to sales, however, has remained relatively steady at about 6% of sales compared to about 4.5-5% in previous years. As the base effect of the tax savings wears off, advertising expenditure growth will return to normal levels, though in absolute terms it will still grow.

As far as profits are concerned, most companies have done quite well. Britannia suffered a decline of 22.5% in net profit due to rising expenditure. Nirma and Nestle's net profit too declined during the quarter mainly due to a sharp rise in raw material expenses. Marico, Dabur and Hindustan Lever ended the quarter with very good growth rates, above 30% in net profit.

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E4M Our strategy is to target younger audiences through Sports: Rajiv Dubey, Dabur

The Head of Media at Dabur India spoke exclusively to exchange4media on the World Cup, associating with Indian Idol, the company’s digital spending and much more

e4m by e4m Staff
Published: Oct 27, 2023 6:15 PM  | 1 min read
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With quirky campaigns, memes and moment marketing, timed with the ongoing World Cup and particularly the India-Pakistan matches, Dabur India has got considerable consumer attention for its popular brands – Red Paste, Cool King Hair Oil, Chyawanprash, Dabur Vita and the recently launched Bae Fresh Gel toothpaste.

The 140-year-old company is going big on key sporting events, World Television Premiere (WTP) movies and reality shows. It is now gearing up to become the title sponsor of popular talent show ‘Indian Idol’ on Sony TV for the first time, shared Rajiv Dubey, who leads the media strategy at Dabur.

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Swapan Seth's new book 'COOL' is out

The book is a reflection of the author's 'eclectic taste across categories'

e4m by e4m Staff
Published: Oct 27, 2023 6:07 PM  | 1 min read
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Advertising professional and art collector Swapan Seth has announced the launch of his new book COOL. The book is described as "a ready reckoner to the hip and the happening, of the known and the very unknown."

The book is a reflection of the author's "eclectic taste across categories: from boltholes to exotic hideaways."

COOL has been published by Simon & Schuster India and is available on Amazon.

Seth is an ad veteran with a long and illustrious career in the industry. He became the youngest-ever Creative Director at Clarion at age 24. He was VP at 26 at Trikaya Grey. Two years later, he started his agency Equus.

He writes for publications such as The Economic Times, Hindustan Times and India Today. This is his second book and he has previously published THIS IS ALL I HAVE TO SAY.

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Disney Star signs 9 sponsors for Asia Cup PAK

Charged by Thums Up, Nerolac Paint+, Amazon Pay, Jindal Panther, My11Circle, MRF, Samsung Galaxy Z Flip5, Wild Stone and Thums Up come on board

e4m by exchange4media Staff
Published: Aug 26, 2023 11:48 AM  | 1 min read
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e4m Staff Disney Star has signed nine broadcast and digital streaming sponsors for the upcoming Asia Cup.

Charged by Thums Up, Nerolac Paint+, Amazon Pay, Jindal Panther, My11Circle, MRF, Samsung Galaxy Z Flip5, Wild Stone and Thums Up have come on board for the upcoming tournament.
As reported earlier by exchange4media, Disney Star has sought Rs 26 crore for the co-presenting sponsorship on TV and Rs 30 crore for Disney+ Hotstar.

According to industry sources, the associate sponsorship on Star Sports has been priced at Rs 19.66 crore, whereas for the ‘powered by’ sponsorship on Disney+ Hotstar, the broadcaster is seeking Rs 18 crore.

As per the information available with exchange4media, Disney+ Hotstar has three sponsorship tiers-- co-presenting (Rs 30 crore), powered by (Rs 18 crore) and associate sponsorship (Rs 12 crore). The broadcaster is offering an estimated reach of 120-140 million for co-presenting sponsors, 90-100 million for powered by and 60-70 million for associate sponsorship.

A spot buy for 10 seconds has been priced at Rs 25 lakh for the India vs Pakistan matches, while for the non-India matches, the ad rate for 10 second is Rs 2.3 lakh. The India matches plus the final for ODIs has been priced at Rs 17 lakh per 10 seconds.

Asia Cup is scheduled to be held from 30 August, 2023, to September 17, 2023.

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Sorted 360 wins creative & social media mandate of Reliance Mall

The agency will manage offline and online campaigns for Reliance Mall

e4m by exchange4media Staff
Published: Aug 26, 2023 10:54 AM  | 1 min read
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Sorted 360, an integrated creative and social media agency, has won the mandate to providing brand solutions for Reliance Malls across India.

“Sorted 360 is set to enhance Reliance Malls' market presence with their unparalleled creative prowess and strategic thinking,” read a press release.

“Sorted 360's commitment to pushing the boundaries of creative communication aligns perfectly with Reliance Malls' ethos. With a pan-India presence spanning across 19 cities and growing, Reliance Malls has consistently captivated customers by offering an array of Reliance brands and third-party fashion & lifestyle brands. The mall has established an unparalleled connection with its patrons through superior quality, a remarkable value proposition, and an unmatched shopping experience,” it read further.

"We are thrilled to welcome Sorted 360 as our trusted partner in advancing our brand presence across the nation," said the Head of Marketing at Relaice Malls. "Their proven expertise in retail, shopping center management, and innovative creative strategies make them the perfect fit for our vision."

"Partnering with Reliance Malls is a testament to our commitment to shaping extraordinary brand experiences," remarked Prerana Anatharam, Co-founder of Sorted 360. "We are excited to leverage our strategic and creative acumen to further elevate Reliance Malls as the epitome of convenience, choice, and excellence."

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e4m by exchange4media Staff
Published: Aug 25, 2023 4:39 PM  | 1 min read

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e4m by exchange4media Staff
Published: Aug 25, 2023 4:38 PM  | 1 min read

KlugKlug onboards Hemang Mehta as Country Manager for Indias

Mehta was most recently Head of Agency Relationships at Network 18 Media & Investments

e4m by exchange4media Staff
Published: Aug 24, 2023 3:35 PM  | 1 min read
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KlugKlug has appointed Hemang Mehta as its Country Manager for India.

Mehta will play a pivotal role in driving KlugKlug's growth and expansion within the Indian market and be responsible for Sales & GTM Strategy

Prior to that, he has also represented organisations like Exponential (now VDX.tv), India Today Digital and Rediff.com. His expertise spans various domains including digital media sales, mobile marketing, media planning, and buying, social media marketing, and more.

Hemang Mehta expressed his enthusiasm about joining KlugKlug, saying, "I am thrilled to be a part of KlugKlug, a forward-thinking platform that is reshaping the influencer marketing landscape. As much as I look forward to collaborating with the exuberant team at KlugKlug, I am super excited to interact with the brands to deliver powerful data-backed Influencer solutions that will guarantee business outcomes."

Commenting on the appointment, Kalyan Kumar, Co-Founder and CEO of KlugKlug, stated, "We are excited to welcome Hemang Mehta to our team as the Country Manager for India. His extensive experience in digital media sales and marketing will be instrumental in driving our efforts to provide influencer marketing solutions to our clients. We believe Hemang's leadership will be key in scaling our operations and expanding our reach within the Indian market."

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