InvestorQ : Why is it that FMCG companies like Hindustan Unilever, Britannia and even ITC depend so much on the rains each year? How does it impact their stock price performance?
Riya Dwivedi made post

Why is it that FMCG companies like Hindustan Unilever, Britannia and even ITC depend so much on the rains each year? How does it impact their stock price performance?

Answer
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Jignesh Gupta answered.
1 year ago


The FMCG sector has seen a slowdown in the last few years largely due to poor growth in rural incomes. The drought condition in the last 2 years has only worsened the situation for the FMCG companies. Most FMCG companies have a problem of saturating urban markets. While the urban markets are getting saturated, it is the rural markets that can offer them the growth and the spread in market share. This largely explains why large FMCG companies like ITC and Britannia have been urging the government to extend the MNREGA program to augment rural incomes and purchasing power. That is a direct function of monsoons