Indian FMCG Companies Are Unlikely To Be Impacted By Political Unrest

For years, Indian consumer products companies have been operating in Bangladesh, Sri Lanka, and Nepal, with few effects from the local instability. Due to its high earnings from Bangladesh, where its subsidiary generates a sizable amount of its international sales, Marico’s shares fell by almost 6%.

Impacts on other FMCG companies were less severe. ET Intelligence Group: Indian consumer products industries have historically used neighbouring nations like Bangladesh, Sri Lanka, and Nepal as frontier markets. However, Indian businesses were never significantly or permanently impacted by political or economic unrest in these nations.

Marico shares ended At 6%

Even though a number of consumer products businesses are present in Bangladesh, including Asian Paints, Dabur, Emami, Godrej Consumer Products, and Britannia, their exposure is not particularly important to their overall business operations.

It is therefore not surprising that Tuesday’s market performance for the majority of fast-moving consumer goods (FMCG) companies was rather flat. However, given the company receives roughly 12% of its income from the eastern neighbour, Marico shares ended the day nearly 6% lower.

Bangladesh Turmoil Affecting Indian Companies

The business established a subsidiary in Bangladesh in 1999, and it went public on the Dhaka Stock Exchange the following year. With 44% of its foreign revenue coming from outside the country in the most recent fiscal year, the subsidiary has grown to be a major contributor to its Indian parent company’s entire operations over the years.

The company operates five depots in addition to two plants in Gazipur, Dhaka, Bangladesh. It is one of Bangladesh’s top three international FMCG firms. The turbulence in Bangladesh will have an effect on other companies’ earnings in the upcoming quarters. One of the elements affecting Asian Paints’ performance in its overseas operations during the June quarter was the political unrest in Bangladesh.

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