Feeling the pinch

INDIA INC PERFORMANCE IN Q1/ PERSONAL CARE (FMCG)

Personal care products firms underperformed during the quarter ended June with 10.52 per cent rise in sales and 15.72 per cent growth in net profit. Operating margins were down by 56 basis points to 16.16 per cent, indicating continuation of pricing pressure.

Hindustan Lever, Nirma and Henkel India "� the three major soaps and detergent manufactures "� posted single-digit growth. Dabur, Colgate, Gillette and Marico, which have been more into personal care and healthcare products, recorded double-digit growth in sales.

Hindustan Lever posted 8.71 per cent growth in sales for the quarter ended June 2006. Its net profit rose by 26.22 per cent to Rs 379.26 crore.

The core categories of soaps & detergents and personal care have grown by 13 per cent each during the quarter. One important aspect of the quarter's performance for Hindustan Lever has been the loss of market share in skin care and oral care.

On the positive side, the launches and re-launches have assisted good volume growth while increasing price realisations have resulted in improvement of margins.

Nirma had disappointing quarter with sales growth of 7.67 per cent. With operating margins dipping sharply by 610 basis points to 22.61 per cent, Nirma posted 3.32 per cent decline in net profit. Colgate, on the other hand, reported 19.85 per cent rise in net sales on account of a mix of volume growth, improved product mix and price realisations.

Among other players, Marico posted a strong revenue growth of 36 per cent for the quarter ended June 2006 and its net profit grew by a healthy 42 per cent.

The growth in revenues for Marico was driven by an organic revenue growth of 23 per cent and inorganic growth arising from acquisition of brands such as Nihar, Manjal, Aromatic and Camelia during the year.