HUL's detergents slowdown
HUL distributors just managed to marginally miss their target for the month. HUL offtake growth was around 7-10% for Sep'21 and ~10% growth for the quarter. The growth for the month was driven by growth in the foods and nutrition category. Both categories exceeded their monthly sales target. In fabric care performance was below the company's expectations – impacted by price hikes taken over previous months. HUL has further taken price hikes in select SKUs. Ahead of the festive and winter season, personal care product sales recovered. The inventory for most of the categories was normal across categories. During Sep'21, the stock holding continued to remain at healthy levels of 7-9 days; inventory levels in metros are lower compared to overall inventory levels. HUL took price hikes in detergents to mitigate input cost inflation. HUL stepped up product innovation in personal care – ahead of the festive/winter season. The trade incentives for dealers/trade outlets, HUL is giving a 2-4% offer in Tomato Ketchup. HUL is also giving 2% incentives on select detergents and 2.5% incentives on creams. As per the understanding, HUL is giving additional incentives on personal care products to offload old inventory ahead for the festive/winter season.
Nestle - foods, beverages, and chocolates & confectioneries off take continues to remain strong
Nestle's offtake growth witnessed high growth in Sep'21 and ~10% growth for the quarter. The performance was driven by strong growth in culinary products (Maggi), chocolates & confectionery, and beverages business. The performance of the dairy business was under pressure in the East. Nutrition business performance was muted due to poor performance in the south and east. Distributors met their target sales during the month. There was a pick-up in professional food services and vending business with an increase in out-of-home mobility. The supply chain was normal with no stock out in any of the categories. In Sep'21, the overall inventory levels at distributors increased marginally at 10-12 days. Food & Beverages inventory holding was at 5-8 days while Nutrition inventory was at 8-10 days. Nestle has launched Ceregrow's small pack of 100gm to drive growth. Nestle is giving 2-6% on milk and 3-6% in beverages (Nescafe Gold 4-6% and Nescafe/Sunrise 3-4%), 1-2% in Maggi Noodles, 4-10% in Maggi Sauces and chocolates & confectioneries.
Dabur -Beverages, foods, and hair care drive did well; health care under pressure with the easing of lockdown
On an overall basis, Dabur grew by 8-9% during August and expected growth at ~10% for the quarter on a high basis. Dabur's performance was driven by a strong offtake for beverages, foods, and hair care portfolio. Health care was under pressure due to high base and lower offtake with the easing of lock down. Oral care has shown moderate performance during the month in the east and south. Chyawanprash and honey underperformed due to the high base of last year and moderation of off take with the easing of lock down. Beverages did well during the month due to higher demand for home consumption and a favorable base - particularly in the North. The performance in the North was strong while the South and West were below expectations. The supply chain was normal with no stock out witnessed across categories and regions. The inventory days have marginally gone up to 8-10days during the month. Dabur has increased incentives in Chyawanprash/honey to 3-6%. The incentives of 15-18% were given on Glucose, 2-7% on Hajmola, and 2.5-3.5% on Dabur Lal Tail. Dabur is also giving incentives of 8-10% incentives on Real Juices.
Marico - Foods, and hair oil category rose in performance.
Marico distributors struggled to reach their monthly targets during the month. We expect Marico to report offtake growth of 5-7% and high single-digit to low double-digit volume growth for the quarter. The offtake for meal maker, oats, and hair oil (Parachute and VAHO) remained strong while Saffola edible oil offtake was impacted. Nihar, Parachute & perfumed coconut oil performance was in line with the target. More than 50% price hikes in edible oil has impacted the offtake of Saffola edible oil. Notably, Chawanprash and Honey's performance was muted post easing of lockdown restrictions. The availability across brands and SKUs was normal and there were no supply constraints faced during the month. Notably, distributor inventory holding levels further increased to 15- 18days vs. 14-16 days -elevated levels compared to historical levels. Marico offered 1litre free in edible oil on purchase of 60Ltrs. Marico also gave 3-5% incentives on honey and 2- 5% on oats. The higher incentives of 10%-18% were offered in chyawanprash to liquidate old inventory
ITC -Cigarette off take improves; foods off take remained strong
ITC's foods business is expected to grow at 12-15% and the cigarettes business is to witness mid to high single-digit in September. In cigarettes, cigarette sales continue to improve sequentially with the easing of restrictions on increase in out of home mobility and opening of the wholesale channel. The foods category continued to do well supported by higher trade incentives in noodles. Food growth was driven by Aashirvaad Atta, Mom's magic, Sunfeast, and Bingo. The off take in personal care continues to improve on a sequential basis. Notably, the south witnessed recovery with the easing of restrictions. The overall inventory levels remained stable at 8-10 days, like last month. Food category inventory was at 8-10 days across geographies. The cigarette inventory was at normal levels of 5-8 days. The supply chain was normal with no stock out witnessed in any of the categories. During the month, ITC provided an average of 3-5% incentive in foods, 3-5% in-home care, and 5- 7% incentives in personal care.
GCPL - air fresheners and soaps drove performance; HI off take impacted
due to erratic climate
GCPL distributors struggled to meet their monthly target sales during the September. GCPL off take growth is expected to be around 8-10% for the month and low growth is expected for the quarter. The growth was driven by a pick-up in hair color, air fresheners, and strong performance in personal care. Hair color performance improved with trade support from the company. High offtake was impacted due to erratic monsoon during the month. The supply chain was normal with stock availability across products and SKUs during the month. The inventory levels increased marginally to 10-14 days. GCPL launched Jumbo Fast card mosquito paper during the month. GCPL in personal care gave 4% incentives on Cinthol Soaps and 14% on Godrej No. 1 soap, 3% on Ezzy, and 8% on Rich Foam Cream. In Homecare, GPCL gave 14% incentives on coils and 25%/10% on AIR/AIR pocket during the month.
Emami's performed well with good offtake in Boroplus ahead of the winter season
Emami's distributors across geographies marginally missed their targeted sales for the month. 6-9% off take growth is expected for September and 8-10% growth for the quarter. The demand was witnessed in Pain management and Hair Oils (Navaratna Oil, Kesh King, and 7 Oils in one) across geographies. Boroplus off take has picked up ahead of the winter season. The stock availability was normal across geographies. The performance in the north recovered during the month. The inventory holding at distributor levels remained at elevated levels of 18-20 days ahead of the winter
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