Weak monsoon wouldn't impact FMCG biz materially: Emami

Emami Group has declared its first quarter numbers. In an interview to CNBC-TV18, NH Bhansali, chief executive officer of Emami Group says, there wouldn't be any material impact of weak monsoon or the industrial production slowdown on the FMCG business per se.

He sees a top-line growth of around 16-18% and bottom-line growth of 18-20% this fiscal. Below is the edited transcript of his interview with CNBC-TV18's Latha Venkatesh and Ekta Batra. Q: How exactly the consumer non-durables market is panning out? We just got the IIP figures for June and the non-durables contracted by 1%. How exactly are things looking on the ground at this point? Do you expect it to worsen, considering the monsoon situation? A: We have not felt any jerk as of yet. Business is good. On the ground, things are happening, rural sales are also happening. We do not feel, as of now, that there would be any material impact of weak monsoon or the industrial production slowdown on the FMCG business per se. We are catering to the masses, I think the impact would not be material, if at all. Q: What about the volume growth this quarter as well as the pricing growth? We did see some amount of good volume growth coming from couple of your peers. What did you clock-in in this quarter? What exactly were the price increases, if any, as well? A: In the domestic business, we had overall growth of 22.2% for the quarter. That was led by volume growth of around 15%. So, domestically we have performed well. Compared to our peers also we are doing very good. In overseas, we had taken certain corrections. So, we had reduced our second distributors inventory. We had also discontinued few of our brands there, low margin product. So, overall there has been a 14% growth, but domestic growth has been very high at 22%. Q: How are margins panning out? We understand that your margins fell by about 1% from 22% to 21%. Will you see greater pressure because as we get worse news of the drought, perhaps raw material prices go up? A: I do not think so. If you look at our cost of goods sold (COGS), it has increased by just 10 bps, despite increase in the prices of major raw materials like menthol compared to the last period. We have managed it very judiciously. Q: What should be work with in terms of full year growth and full year margins? A: I think it should remain at last year’s level. I think top-line growth of around 16-18% on a lower side also can be well expected. Bottom-line also of 18-20% can be expected even in this fiscal.