FMCG Stock Prices Up as HUL, ITC, Britania gets Nod under Food processing PLI Scheme

7 December 2021
3 mins read
FMCG Stock Prices Up as HUL, ITC, Britania gets Nod under Food processing PLI Scheme

An Overview

A day after the administration declared that sixty businesses had been approved for the production-linked incentive scheme for food processing, most constituents of the Nifty FMCG shares index were trading in the positive on December 7.

HUL, ITC, Dabur India, Nestle India, Britannia and Tata Consumer have all submitted investment proposals to the food processing ministry, which has approved them. On the BSE, ITC was up 0.6 percent to Rs 219.10, HUL was up 0.8 percent to Rs 2,326.55, while Britannia Industries was up 1% to Rs 3,528.55.

The Cabinet authorised a PLI scheme for the food-processing sector in March 2021, with a budget of Rs 10,900 crore. According to the government, the scheme would help create 2.5 lakh employment, promote exports, and ensure that consumers had access to a greater selection of value-added products.

Further Key Takeaways

The ministry had requested expressions of interest (EoI) and suggestions for taking advantage of these incentives, with the deadline for proposals being June 24. “The ministry had received 91 applications under Category 1 in response to the EoI. Under the chairmanship of the minister, the FPI (food-processing industries) approval committee has approved 60 applicants in Category 1,” in a statement, it said.

According to the list, HUL, ITC, Dabur India, Nestle India, Britannia, Tata Consumer and others have had their applications approved in the ready-to-eat and ready-to-cook categories. In the fruits and vegetable category, Tasty Bite Eatables, Parle Agro, ITC, Varun Beverages, Nestle India, Hindustan Unilever, Tata Consumer Products, Dabur India and others received approval.

Falcon Marine Exports, Avanti Frozen Foods, and ITC are among the eleven marine food applications that have been approved. Parag Milk Foods, Amul, Sunfresh Agro Industries, and Indapur Dairy & Milk Products all have proposals in the mozzarella cheese category that have been authorised. The Nifty FMCG shares index was 0.6 percent higher at 37,024.20 points at 9.50 a.m.

While crude price stability bodes favourably for paint companies, FMCG may continue to experience difficulties

Paint businesses expecting to restore margins to last year’s levels by March 2022 may benefit from the stability and fall in oil prices. However, commodity cost challenges are expected to remain for fast moving consumer goods (FMCG) companies, including India’s food heavyweights; at least, that is what early third quarter FY22 patterns imply.

Price hikes for FMCG and food industries range between 3 and 20% based on items, SKUs, and other factors, making everything more expensive, including bread, cookies, soaps, shampoos, detergents, and so on. Grammage reduction has also been implemented, mainly in lower-priced offers.

Paint companies, on the other hand, including industry giants Berger and Asian Paints, increased prices by four to five percent beginning December 5, bringing the year-to-date increase to 18 to 19 percent.


Frequently Asked Questions (FAQs)

What is the fast-moving consumer goods (FMCG) industry?

The fast-moving consumer goods (FMCG) industry is India’s fourth-largest, with household and personal care products accounting for half of all FMCG sales. The sector’s main growth drivers have been increased awareness, easier access, and changing lifestyles.

What is the significance of FMCG?

FMCGs are inelastic products that impact every aspect of consumer life, hence they play a significant role in the economy. Businesses that offer FMCGs to rural communities can help create jobs and lower the cost of these products in local areas.

What is the process of FMCG distribution?

Three key players in the FMCG distribution chain are agents, merchants, and facilitators. Agents increase sales by advertising a company’s goods, but they never stock or purchase it. An agent might be an independent contractor or a firm employee.