Source: LiveMint.com, Nov 26, 2018
When the goods and services tax (GST) was rolled out in July 2017, one question was whether large fast moving consumer goods (FMCG) firms would gain at the expense of the unorganized sector. While it may take a few years before one can have a certain answer, managements of most large listed firms have so far not called out any significant changes on this front.
But an answer to this question could lie elsewhere. Small and regional companies are faring much better than the larger ones in recent quarters, according to retail sales data of the FMCG sector, provided by market researcher firm, the Nielsen Co. While the top 50 firms contributed to 60% of revenue in the 12 months ended September with a healthy 10.6% growth, the tail-end of 48,000 companies grew by a much higher 18.5%. What’s even more interesting is that this growth differential has risen in the past few quarters (see chart). The September quarter saw smaller companies growing at 38% versus 15% for the national firms. Read the rest of this entry »