Volume growth intact in FMCG space: KRChoksey

KRChoksey has come out with its report on FMCG sector.

FMCG sector registered a strong top line growth of 19.1% to Rs 21300 crores in Q3FY11 on the account of strong volume growth seen across the segments. Results for our KRC FMCG Universe were largely inline with our estimates with top line growth of 15% y-o-y. Nestle, GSKCHL & ITC being the top performers registering Net sales growth of 24%, 21% & 19% respectively, on the account of strong volume growth across their categories.

EBITDA for the sector was up 13% y-o-y in Q3FY11 on the back of strong momentum in the topline. However margins for the sector continued to remain under pressure & declined by 108 bps y-o-y & for KRC FMCG universe by 59 bps y-o-y mainly due to significant rise in the key raw material prices (Palm oil, copra, Tea, Coffee). PAT for FMCG sector grew by 13% yo- y.

Volume growth continues to drive topline: Despite high inflation, FMCG sector continued to witness healthy toplne growth of 19.1% y-o-y primarily driven by the strong volume growth & limited price hikes seen in Q3FY11. Among the KRC universe, Nestle registered highest growth of 24% y-o-y, driven by 27% y-o-y increase in the domestic offtake. HUL continued to post strong topline growth of 11.6% led by 13% volume growth in domestic consumer business. GSKCHL grew by 21% y-o-y with robust volume growth of 18% & 13% in Boost & Horlicks respectively. ITC

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