Price hike to help FMCG cos post higher revenues in Q3, volumes may get hit

Volumes estimated to remain weak; gross margins under pressure due to high raw material costs

Fast-moving consumer goods (FMCG) companies are expected to report healthy revenue growth on the back of price hikes which companies took to fend off commodity inflation in the October-December quarter (third quarter, or Q3) of 2021-22 (FY22). However, volumes may come under pressure due to a high base in the year-ago quarter, coupled with weak rural demand in recent months. Urban growth in the quarter gone by though has witnessed recovery.

Rural demand witnessed an impact towards the fag end of the second quarter (Q2), which continued in Q3FY22.

Brokerage PhillipCapital also cited delayed winters, which impacted the sale of skincare and