FMCG Sector Update - Covid And Inflation; The Two Demons To Be Slayed: IDBI Capital
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IDBI Capital Report
In this report we have attempted to analyse; raw material cost trend, price hikes, and impact of Covid uncertainty on Indian FMCG companies.
Our primary observations and conclusions are as follows;
(i) raw material cost for edible oil, packaging material and paint-related-products rose significantly during Q1 FY22; category leaders have taken larger price hikes compared to 2nd/3rd brand to protect margins
(ii) in international market; 88% of the regions, where Indian FMCG company has significant business presence, have already witnessed 3rd/4th wave and is now more stable; we observe that subsidiaries of Dabur India Ltd. are relatively more immune to Covid disruptions as most of the countries where the company has presence are witnessing significant decline in number of daily Covid cases.
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