Key Points
FMCG companies reported muted performance in the December quarter (Q3FY24) due to sluggish rural demand and increased competitive intensity, affecting overall volume growth..
While gross margins are improving due to stable raw material prices, increased advertising spending may momentarily impact EBITDA margins but is anticipated to yield long-term benefits in market share retention..
Meanwhile, in the last 1 year, ITC percent has gained 7 percent whereas HUL is down 3.6 percent as against an over 19 percent gain in Nifty FMCG and over 27 percent increase in Nifty..
HUL posted a standalone net profit of 2,519 crore for the third quarter of FY24, a growth of just 0.55 percent from 2,505 crore in the same quarter of last fiscal year..
Ultimately, investors must evaluate these factors in alignment with their own investment objectives and risk tolerance to make an informed decision regarding long-term investment in either HUL or ITC within the FMCG sector..
