Two leading FMCG companies Godrej Consumer Products and Marico have reported disruptions in their domestic and global businesses and expect a decline in their Q1 (January-March) revenuedue to the Covid-19 crisis.
Godrej Consumer Products Ltd (GCPL) said it would report "high teens revenue decline" in the January-March quarter.
WhileMarico said its Q1 EBITDA may see "modest decline" following disruptions in trade impacted by dip in the revenue of the company on account of pandemic of Covid-19 and lockdown, which has disrupted the market.
Maricohas started an "aggressive cost management exercise" to mitigate the impact of reduced sales in such "unprecedented times".
"Revenue decline (both in India and International business), coupled with an unfavourable mix in the India business, will translate into a modest decline in earnings before interest, tax, depreciation and amortisation (EBITDA) in this quarter vs the corresponding quarter last year, Marico said in an quarterly update.
Marico's international business was also impacted due to the pandemic of Covid-19.
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"With many of the territories experiencing partial or complete lockdown in March, the international business recorded a mid-single digit decline on a constant currency basis," it said.
GCPL witnessed steady demand till mid-March, the lockdown in many geographies resulted in "virtually no sales" in the latter part of the month, thus significantly impacting sales performance for the quarter.
In the domestic market, it has witnessed a double-digit decline in the performance of its distributors and is awaiting data on the stock levels on general trade shelves, GCPL said in a Quarterly Update 4Q FY20''.
"In India, demand was steady till the outbreak of Coronavirus and slumped due to disruption of both back end and front end supply chain in the last twelve days of March. March also happens to be the start of the season for a few of our categories like soaps and household insecticides.
"Consequently, we will report around high teens revenue decline in the quarter," said GCPL.
In the international segment, the Godrej Group firm expects to record "around mid single digit sales decline" in rupee terms, resulting in "consolidated sales declining around low double digit in INR terms for the quarter".
GCPL gets around half of its revenue from the foreign markets.
"We believe there should be a gradual bounce back in the near term driven by restoration of the supply chain, higher consumption for Personal Wash and an ongoing favourable season for Household Insecticides," it said.
GCPL further said it has "continued to gain market shares across key categories of operations".
While Marico said it is "focusing on movement of essential food and grocery items to the consumers subject to necessary approvals from local government authorities and taking all possible efforts to ensure uninterrupted supplies of essential products to our customers across channels (general trade, modern trade and e-commerce) within the existing constraints".
India is presently going through an unprecedented complete lockdown of three weeks, ending on April 14, to prevent the spread of the virus.