BQ Survey | No Resurgence In Demand For Consumer Goods In Second Quarter

Sales volumes remained largely unchanged during the second quarter and the credit period—time between delivery of goods and payments—remains high, according to the survey of nine large distributors of consumer goods across India.

That’s in line with earnings forecast for consumer goods makers for the second quarter. According to analysts’ estimates compiled by BloombergQuint, earnings are expected to remain muted amid slowing domestic infrastructure spending and sluggish export markets. That’s on the back of a tepid increase in average volumes at 5.9 percent for the largest companies in the sector in the quarter ended March.

Here’s what FMCG distributors said about consumption in the July-September quarter:

• Maharashtra: Demand remains weak with no growth; credit days remain high.
• Mumbai: Growth in personal care, home care and food segments were in low single digits.
• Goa: Growth either unchanged or negative as there was no pick-up in sales, while credit period was nearly over a month.
• Telangana: Demand remained unchanged across categories over the last quarter. Credit period was over a month.
• Punjab: Demand remained unchanged over last quarter. Credit period ranged between 21 and 45 days.
• West Bengal: Despite the festive season being in full swing, demand declined by nearly 35-40 percent across all categories and inventory carrying days is over 15 days.
• Uttarakhand: This is the worst quarter in the past year as credit days have risen to a month and festive demand hasn’t emerged.
• Delhi-NCR: Demand, which grew in single digits in the previous quarter, has remained unchanged.
• Odisha: Volume fell even as value growth remained flat.

Marico, in its quarterly update, had said the “demand and consumer sentiment weakened progressively during the quarter”.

“Liquidity challenges led to some correction in trade inventories and exerted pressure on channel partners investments and returns,” the company said, adding sales through traditional channel remain under stress in rural and urban markets. Modern trade and e-commerce sales, it said, have stayed on course.