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Godrej Consumer Products and Emami are two major players in the consumer goods industry in India who are struggling with the high prices of palm oil. According to their CEOs, Sudhir Sitapati and, respectively, the high prices of palm oil derivatives, such as PFAD, have necessitated sharp price increases, grammage cuts, and trade scheme reductions, leading to trade destocking. Sitapati also stated that there is a requirement for one or two more rounds of pricing in soaps to get back to the company’s normative margins.
Godrej Consumer Products anticipates an operating margin of 22-26% for fiscal 2025, provided raw material costs remain stable. Emami, on the other hand, expects further 1-1.5% price increases in the coming quarters, on top of the 2% hike it took in the December quarter.
Britannia Industries has already announced a price hike of 4-5% in the current quarter and plans to take further pricing actions over the next nine months to maintain its margins. Marico Ltd has taken a 10% price hike in coconut oil and 20% in edible oil so far this fiscal, but has stated that further price hikes are necessary to cushion its profit margins.
All of these companies, including Godrej Consumer Products, Emami, Britannia Industries, and Marico, are struggling with high raw material costs, particularly copra and vegetable oil prices. They are expecting to take more price hikes in the coming quarters to maintain their profit margins. The situation is expected to continue for the foreseeable future, as the prices of these raw materials are expected to remain high.