FMCG Sector: Rain may lead to decline in consumption and decline in revenue of FMCG companies

New Delhi| There has been a huge decline in domestic consumption due to recent heavy rains across the country and floods in many parts. Due to this, there is a possibility of decline in the revenue of FMCG companies in the July-September quarter. This also had a direct impact on the shares of these companies, where a decline of up to six percent was seen.

In a statement issued by FMCG giant Dabur, it was said that due to heavy rains and floods, out-of-home consumption and consumer demand have been affected in the second quarter. This could reduce its revenue by 5-6 per cent. However, now demand is beginning to show improvement. Analysts believe that the impact of heavy rains and floods can be seen on all FMCG companies.

Dabur India shares fell nearly six percent amid fears of a decline in revenue and profit. Tata Consumer saw a decline of 3.43 per cent, Varun Beverages 3.63 per cent, Britannia 2.12 per cent and Godrej Consumer 2.83 per cent.

Macquarie has cut Dabur’s FY25 EPS estimate by eight percent. Macquarie has also reduced its target price for Dabur to Rs 560 per share. Brokerage companies expect the company’s sales to increase from October, but the slowdown in demand is a matter of concern.