FMCG sales lose momentum, but grow 20% on year

India’s fast-moving consumer goods (FMCG) market growth has been decelerating steadily every quarter for a year, reflecting a slowdown in demand for personal care, household and hygiene products that drove the sector last year. However, sales expanded 20% during the year ended March, mainly driven by price hikes and higher sales of packaged food and commodities.

The fourth quarter ended March saw a 5% increase in overall sales by value, according to the latest report from Bizom, a sales automation firm that tracks 7.5 million retail stores, compared to 20% sales growth in the December quarter. This is largely helped by the festive season, despite the second wave, 46 per cent in the September quarter and 8.2 per cent in the June quarter.

Sushil Kumar Bajpai, President, Sushil Kumar Bajpai said, “The pace of growth has slowed down due to the squeeze from the overall level of domestic budget inflation, but it is still not a cause for concern. We expect the price hike to stabilize. Sales will increase later.” In RSPL Group, which owns Ghari brand of detergents and Venus soap.

During the quarter, home care products declined 23% due to lower sales of hygiene products as consumer interest in stockings plummeted after the second pandemic wave, while the personal care category declined 5%.

“Even the beverages managed to show a growth of 1% as they struggled with the late start of the summer season, impacted by the third wave as they gear up for stock outlets at the end of January. However, a pandemic could take a toll out of insulated heat home consumption,” said Akshay D’Souza, head of development and insights at Mobisi Technologies, which owns Bizom.

Commodity products saw the biggest rise in prices and the Russia-Ukraine crisis is pushing up prices of products like edible oil which had cooled earlier due to import duty cuts in previous quarters. Mohit Malhotra, CEO, Dabur said, “The operating environment remains extremely challenging with unprecedented inflation in raw materials. We are undertaking calibrated price hikes to offset part of the inflation impact, apart from launching cost optimization initiatives. ”

Even as the overall consumer electronics market, including televisions, smartphones, laptops and home appliances, saw a 17% increase in sales in the last quarter and 19-20% in 2021-22, as per several market researchers. The figures are as per industry estimates.

“In FY2011, the first year of the pandemic, consumers were in shock due to investment due to job losses, impact on earnings and a collapse in the stock market. However, sentiments recovered sharply in FY2012, with the economy witnessing a second wave. More later.” Deepak Bansal, Vice President, Home Appliances and AC Business, LG Electronics India said.

As per estimates, the sales of refrigerators grew by 24%, microwave ovens by 14%, smartphones by 17%, laptops by 30%, washing machines by 12% and televisions by 20% in 2012 compared to 2012. . However, researchers such as GFK have said that in 2022-23 there will be vast improvement in large-scale sectors as well.

Kamal Nandi, Business Head, Godrej Appliances said, “We expect sales to pick up further this summer, as the demand has come down for the last two seasons due to the pandemic and the massive wedding season as well. But there will be improvement too.”

Originally published at Pen 18

rld: RLD plans to extend base in west UP, eyes Dalit votes in Rajasthan

After marking its revival in the recently concluded Uttar Pradesh Assembly elections, the Jayant Choudhary-led Rashtriya Lok Dal (RLD) is expanding its support base beyond Jats to broaden its base in western UP for future elections. Actively working towards expansion. Also for the Rajasthan assembly elections to be held next year.

A leader close to Choudhary said the party was eyeing Dalit support in western Uttar Pradesh and Rajasthan and would focus on social justice through agitations and possibly organizational changes. In western UP, it will also consider winning over some backward castes like Prajapati and Saini.

RLD chief Jayant Singh along with Azad Samaj Party chief Chandrashekhar Azad on Sunday went to Pali in Rajasthan to meet the family of a Dalit youth, Jitendra Meghwal, who was stabbed to death. He gave a memorandum to Chief Minister Ashok Gehlot demanding financial assistance, government jobs and a house for his family. He also demanded fast-tracking of cases related to atrocities against Scheduled Castes, to fill up the vacancies in bodies like the Scheduled Castes Commission at the earliest. Earlier this month, Singh met Azad and, in a post on Twitter, described the discussions as “broadening” from “youth empowerment to social justice”. Dalits make up about 18% of Rajasthan’s population, while Jats – the RLD’s traditional support base – form about 12% in the state.

In western UP, even though its performance was not very impressive (winning 8 out of 33 seats), the party which did not get any seats in the 2019 general elections and only one in the 2017 assembly elections, got a new lease of life. have been found. This time. This comes against the backdrop of a sharp decline in the strength of the BSP in the state. Constituting about 2% of UP’s population, Jats are concentrated in 26 districts in western UP, where their share is as high as 15-20% of the population. However, the current elections in UP have shown that most of the Jats are with the BJP, hence the need for expansion of the RLD here. Dalits, on the other hand, constitute almost five times more than Jats in this region.

Originally published at Pen 18

BJP brass to activate machinery in states due for elections in 2 years

Senior BJP leaders such as Home Minister Amit Shah and party’s national president JP Nadda have taken over the task of preparing the BJP’s electoral machinery in the states going to polls in the next two years.

According to party functionaries including Karnataka, Madhya Pradesh, Rajasthan, Chhattisgarh and Arunachal Pradesh, Shah will visit six states in 14 days in April. He will also go to Bihar for two days this month.

Nadda will visit four states including Rajasthan and Himachal Pradesh. He visited Rajasthan on Saturday and the three-day visit to Himachal Pradesh will begin from April 9. Nadda is likely to visit Chhattisgarh and another state but the schedule is yet to be finalised.

BJP’s Chhattisgarh co-incharge Nitin Naveen told ET, “We are currently busy with the Khairagarh assembly by-election in Chhattisgarh on April 12. We will have a meeting after April 12 and only after that any program of our top leaders will be discussed.

Both the leaders will hold meetings of party workers and MLAs to assess the status of the organization as well as the state governments of the BJP.

The party’s top leadership is also encouraging party MPs to participate in social works and other causes in their constituencies to prepare for the fight for the 2024 general election. During the current Parliament session, Prime Minister Narendra Modi has been meeting MPs of different states in groups. According to people aware of the matter, he has directed the party MPs not only to participate in political activities but also in social works and activities.

For example, the Gujarat unit of the BJP distributed a special saffron cap along with a packet of nutrition chocolates to all party MPs. A similar cap was worn by PM Modi during his recent roadshow in Ahmedabad on March 11. Some party leaders like Dharmendra Pradhan, Giriraj Singh and others have made public appearances wearing caps.

In the coming days, MPs will distribute nutritional chocolates to women in their constituencies as part of the BJP’s women outreach programme.

Originally published at Pen 18

friedman: A subtle shift from Friedman to Kelton?

A popular phrase that economists often borrow to describe inflation is from Milton Friedman: substantial inflation is always and everywhere a monetary phenomenon.

Prices have jumped in the past few months in a way a generation has not seen, prompting central bankers around the world to tighten monetary policy. Of course, India is one of the few countries that have seen worse price pressures; So Mint Road is quiet.

Crude oil, aluminium, steel, copper, fertilisers, natural gas – prices of all commodities have risen and consumer prices have begun to fall.

The first assessment was that the supply disruptions due to Kovid led to the rise in prices. Then it shifted to a lack of chips, then a lack of capacity due to ESG which put a lid on expansion. Now, it is the Russian invasion of Ukraine.

The special thing is that the central bankers are silent on how much their note printing contributes to the price rise. India targets an inflation of 4%, half of which is latitude on either side. But it saw a price increase of 6.07%, well above the upper tolerance limit of 6%.

It is in this background that the monetary policy committee (MPC) of the central bank is meeting this week.

The MPC, led by Governor Shaktikanta Das and Deputy Governor Michael Patra, has argued that the setting is different for India this time.

“Amid the current divergence in policy actions by central banks across the world, we have continued our accommodative stance based on our domestic growth-inflation dynamics,” Das said last month.

The West had a near-zero rate, so would have to hold on, while India does not need it. Patra listed that reduction in central fuel taxes, record food production, supply-side interventions, low pass throughs and high foreign exchange reserves could help mitigate the global inflationary impact.

India’s CPI, which gives about 40% weightage to food, is probably under control due to record foodgrain production, but there could be second-order effects.

“We expect the impact of supply-side disruptions on the agriculture sector to be offset by higher inflationary pressures, primarily the effects of a second round of higher international food prices and input costs, and increased fiscal pressures in the form of government fertilizers and food products. Reason: “The subsidy bill could see an increase,” said Upasana Chachra, an economist at Morgan Stanley.

In addition to inflation targeting, a full-service central bank also sees financial stability as one of its key deliveries.

Last year, Governor Das expressed his concerns about the level of the stock market and retail participation. It’s just getting faster. Indian equities, at nearly 20 times forward earnings, are among the most expensive among emerging markets. Lower returns from traditional risk-free instruments are also forcing savers to shift to riskier assets in India.

“Record negative real interest rates supported asset prices and some discretionary consumption,” said Anant Narayan, senior India analyst at research firm Observatory Group.

Equity funds saw inflows of Rs 3.8 lakh crore in the last one year, more than four times the outflow of foreign funds. In addition, gold imports stood at $50 billion.

A ‘sustainable’ economic recovery is the priority of the RBI. But the recovery is uneven.

Profits of the top 4,200 companies doubled in the nine months ended December, while GDP remained stagnant.

Observatory Group’s Narayan said, “While overall individual consumption has dwindled, it is a dichotomy between India’s thriving ‘formal sector’ of large companies (employing ~15% of India’s workforce) and struggling small businesses. ”

Ultra-lax monetary policy has helped increase financial assets benefiting the wealthy but not the less privileged. Conversely, holding such a policy stance for too long could damage the less privileged and pervert savings behaviour, leading to volatility, as was the case in 2013, although the setting may be different.

“Inflation occurs when the quantity of money increases significantly faster than output, and the faster the quantity of money per unit of output, the higher the rate of inflation. Perhaps no other proposition in economics No. Established as this,” Friedman wrote.

Mint Road’s latest contemporary papers published The Deficit Myth: A Review of Modern Monetary Theory and How to Build a Better Economy by Stephanie Kelton in a rare act that quashes most traditional economic theories.

Should this be seen as a sure sign of a change from Friedman?

Originally published at Pen 18

tamil nadu: Tamil Nadu democratised religion over 100 years ago…tough for radicalism: FM Palanivel Thiagarajan

Tamil Nadu Finance Minister Palanivel Thiagarajan said aggressive Hindutva would be very difficult to take shape in a state like Tamil Nadu as it democratized religion a hundred years ago and its core value system would not be hampered by any kind of fundamentalism.

He also said that the DMK government, under Chief Minister MK Stalin, would try to attract investments to the state from across the world and also work to accommodate employers who move their businesses from Karnataka to Tamil Nadu due to the rising communal tension in Karnataka. want to transfer to.

Thiagarajan had said at a recent GST Council meeting that he had expressed concern about the “faulty implementation of the Goods and Services Tax and the Centre’s increasing control over institutions” that he said would have “serious consequences for the country”.

The Finance Minister said that Tamil Nadu is monitoring the developments in Karnataka as every threat has to be taken seriously. He said, “There is a huge interest (from IT companies wanting to diversify into Tamil Nadu), and we are already in the race. People with us are actively taking it up and our government is working on it. ”

He said that Tamil Nadu has witnessed 53 per cent growth in investments and to attract financial investors and corporates, the state government will organize events in different countries within the next six months. “If we invest Re 1 in capital investment, we want to mix it with external investment,” he said.

Stalin, who was in Delhi last week to meet PM Modi and Finance Minister Nirmala Sitharaman, recently went to Dubai to meet business heads and according to a government statement, MoUs worth Rs 6,100 crore were signed. Which can create 14,000 jobs in Tamil Nadu. ,

Though the BJP is aggressively trying to expand its footprint in Tamil Nadu, Thiagarajan, who has come from a family associated with Dravidian politics for four generations, said the state is the biggest challenge for the expansion of Hindutva. “If Tamil Nadu turns to Hindutva, it will be the final nail for our secular democracy and so I don’t think it will ever happen. Tamil Nadu is the most pious state in the country and it is not because of Hindutva, but because we democratised. Is religion long ago.”

Originally published at Pen 18

Droom to invest Rs 500 to 600 crore for inorganic opportunities, eyes 5-6 acquisitions in 2 years

Droom Technology, which provides a technology platform for pre-owned vehicles, is looking at five to six acquisitions over the next two years to achieve an internal target of $18 billion of gross merchandise value (GMV) over the next five years.

Gurugram based Droom Cloud sells vehicles through dealers where sourcing and refurbishment is done by physical dealers. Certification, sales and distribution are done by the company.

ET learns that the company is looking for acquisitions across the entire chain from auto insurance to auto lending. Droom is looking for an IT services company to attract a talent pool, and is also keen to buy an organized service station chain, such as Pitstop and GoMechanic.

The company plans to spend around Rs 500-600 crore on acquisitions in the next two years. People with knowledge of the matter said that the amount to be paid for the acquisition will be a mix of internal accruals and the amount received from the initial public issue.

Lightbox-venture-backed Droom Technology plans to raise Rs 3,000 crore from an initial share sale. The company had filed its draft red herring prospectus with market regulator SEBI in November 2021.

The company is eyeing a valuation of $2 billion for its IPO. The company’s last funding came about 15 months ago at a valuation of $1.2 billion.

According to the filing, the company plans to spend around Rs 400 crore on inorganic growth initiatives and Rs 1,150 crore on organic growth from the funds raised from the fresh issue of shares in the IPO.

“The process of selecting acquisition targets has already started and it has recently appointed a consultant to explore inorganic opportunities in the insurance sector and recently it has acquired the auto portfolio of a South-based company. Turned down a deal because it strives to be in it. Debt aggregation instead of becoming an NBFC company,” said a senior executive of the company.

An email sent to the company did not elicit any response till presstime.

With all the services available under one umbrella, it will not only improve the GMV for used vehicles from more vehicles sold, but also increase the revenue from insurance, loans, certification and services business earned from the service station.

The company currently derives the bulk of its transaction revenue from vehicle sales, which account for about 3% of the sales value of vehicles.

Globally, used vehicle market companies generate half their revenue in vehicle transactions, and the remaining half comes from service income associated with the sale of pre-owned vehicles.

Droom’s transaction volume increased significantly during the COVID period. The company’s GMV reached around $2 billion in the current financial year. It stood at $1 billion in FY20, according to the company’s DRHP filings.

The company sold around 13,000-14000 vehicles per month on an average in the last financial year.

Originally published at Pen 18

Tiger Global’s 34% tumble brings Coleman’s firm back to earth

In his 20s, he was a hedge-fund wonderkind. By his 40s, a hedge-fund legend. But suddenly, Chase Coleman is stumbling, and tough.

After a tough 2021, his Tiger Global Management has posted a plethora of losses this year that have ruffled the industry – a 34% drop for the firm’s hedge fund through March. The pace of the reversal has stunned everyone, given that Coleman is celebrated as one of the brightest stars of his generation, a standout among elite money managers mentored by the famous Julian Robertson.

The bad trend has been largely bet on stocks, which have been battered by market volatility amid Russia’s invasion of Ukraine and a serious rough patch for fast-growing tech companies in the US and China that have spent so long. Tiger Global’s profits have increased. On Friday, the poor performance inspired humility, something the $100 billion giant has rarely had to express over its two decades of nearly unblemished success.

“At this moment, we are humbled, but steadfast in our belief and confident of the opportunity ahead,” the firm’s investment team wrote in a letter to investors. “We are reevaluating and refining our models using all the inputs available to us.”

A Tiger Global spokeswoman declined to comment.

Created by Coleman and his partner Scott Schlieffer, Tiger Global has long been seen as a return to the industry’s glory years, when double-digit returns were the norm and hotshot managers favored winning companies and lost losers. shortened. Coleman, 46, showed that fees of 2 and 20 could still be a price to pay: In 2020 alone, his flagship hedge fund jumped 48%.

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The recent turnaround in Tiger Global’s fortunes has hurt more than Coleman’s professional pride. In the firm’s $35 billion fund focused on public companies, this year’s losses have hit more than $10 billion to investors, including foundation, endowment and pension funds, as well as insiders from Tiger Global. And according to calculations by the Bloomberg Billionaires Index, Coleman’s personal wealth declined by $1.3 billion.

Coleman worked as a technology analyst at Robertson’s Tiger Hedge Fund for less than four years before becoming the official Tiger Cubs in 2001, the term for the Robertson Protects who started their firm.

Originally Tiger Technology, the new store expanded into payments, education and other areas and was renamed Tiger Global. In the early 2000s, Coleman and Schlieffer added private investment to the mix, realizing before many of their peers that they could achieve higher returns outside of the public markets.

The firm’s first serious hit occurred during the 2008 financial crisis, when it fell 26%, followed by a 1% profit the following year. Coleman vowed to return to his technological roots and avoid industries where politics or macro events might interfere.

That approach paid off handsomely. As of 2020, Tiger Global had an annual return of over 20% in its hedge fund, with losses in just two years.

But now its biggest bet is dragging the fund down. While markets this year were already troubled by high inflation and expectations of a hike in rates, Russia’s war against Ukraine flew with risk.

The tech-heavy Nasdaq 100 and the Russell 2000 small-cap each posted a 20% decline in the first quarter, though losses were narrowed at the end of March.

Tiger Global’s particular undoing was closely tied to the tech companies, especially China, that made it such a success.

An example is JD.com Inc. which began as a $200 million bet in 2009 and eventually made a net profit of $5 billion. As of December 31, it was the fund’s largest holding.

Battered by markets, a regulatory crackdown in China and rising tensions between Beijing and Washington, JD.com is down 20% in New York business last year and 16% in 2022.

“Ultimately, we should have sold more shares in our portfolio in 2021,” Tiger Global’s investment team said in Friday’s letter.

The Fund is not alone in its struggle. Fellow Tiger Cubs Philippe Lafont’s Coteau Management, another firm that did a great job on the back of its tech bets, fell 10% in the first quarter. At year’s end some of its largest equity holdings, Rivian Automotive Inc. and Moderna Inc., declined 52% and 32%, respectively.

The MSCI World Information Technology Index, which rose 562% in the 2021 decade, fell 10% in the first three months of the year, according to data compiled by Bloomberg.

Tiger Global’s hedge fund’s losses extended to its private holdings.

He said in a letter to clients that managers have “adjusted valuations down” for the fund’s private investments to pressure their public-market peers. The fund owns shares in private companies including ByteDance, Stripe, Checkout and Databricks.

It’s unclear what those mark downs mean for Tiger Global’s venture capital business, where assets stood at $65 billion at the end of last year.

As of August, nearly a quarter of Tiger’s private stakes were in China, which has become a minefield for investors amid regulatory action.

President Xi Jinping tightened his grip on the country’s tech sector, imposed new sanctions and imprisoned some officials to rein in what they see as the excesses of capitalism. While recent signs from the ruling Communist Party suggest that action may be easing, the policy has shaken confidence in even the largest and most successful firms.

Also weighing on share prices has been an auditing dispute between China and the US, which would result in Chinese companies being pulled out of US exchanges. There was fresh optimism on Saturday that such an outcome could be avoided after China signaled a willingness to give US regulators full access to corporate audit reports.

In its letter, Tiger Global said it was “encouraged” by China’s recent support for stable capital markets and statements by the government focused on the competitiveness of tech companies. Still, the firm said it knows the risk remains and will be “data-demanding as the situation develops.”

Under Schleifer’s leadership, Tiger’s Private Investment Partners Fund – which takes non-controlling stakes in startups – has delivered an average annualized return of 27%. Last year, those funds grew 54% and returned $4 billion to investors, according to a person familiar with the matter. Even in the midst of this year’s turmoil, investors’ appetite has not waned: In Friday’s letter, the firm said it had received a monthly net inflow into its public funds this year and most recently in its PIP 15 venture fund. was closed with $12.7 billion.

Originally published at Pen 18