Despite the slowdown in consumption, major Fast Moving Consumer Goods (FMCG) companies have increased their spending on advertising and promotions in the third quarter of the fiscal year 2025.
Parachute oil- -maker Marico increased its ad spend in Q3 by 19 percent year-on-year. Marico spent Rs 293 crore on ads in Q3 FY25 compared to Rs 246 in the same period last fiscal. Marico’s profit climbed by 4 percent to Rs 399 crore in Q3. On a quarterly basis, Marico’s spend marginally higher at 1.03 percent on ads. In Q2 FY25, it spent only Rs 290 crore on ads and promotions. The company said its strong growth was fueled by both price hikes and increased volumes.
Marico’s Q3 profit rises to Rs 406 crore, ad spend up 19%
However, despite posting a loss in Q3, Godrej Consumer Products Ltd increased its ad spend. GCPL consolidated ad and publicity spending increased by 6 percent to Rs 364.37 crore in Q3 FY 25 YoY.
Highlighting the challenges in Q3, GCPL CEO Sudhir Sitapati said that the company’s topline growth took a hit due to three reasons- a) slowdown in the macros and urban consumption b) high palm oil prices c) poor season in the Household Insecticides category. Defending the increase in ad spend, Sitapati said such issues are transitory.
GCPL’s Sitapati defends ad spend, says no plans to cut despite margin pressure
“We have chosen not to cut our advertising spends and other investments to increase reach like the rural van program, etcetera,” he added.
GCPL’s consolidated net profit declined by 14% year-on-year in Q3.
Boroline-maker Emami is another company that increased its consolidated ad expenses by 6 percent only to Rs 175.73 crore in Q3.
On the other hand, Dabur slashed its expenditure on ads and publicity with CEO Mohit Malhotra saying, “I think as the consumption story is not great at the time, I think there is pressure on the category growth rate. At this time, if the pie is not expanding, I think it’s a futile effort to spend so much money on advertising”.
Emami reports 8% jump in Q3 profit, ad expenses up 6% to Rs 175.7 crore
Dabur dropped its ad expenses by 7.28 percent to Rs 226.72 crore YoY. In Q2 FY 25 (July-September), the FMCG giant had spent Rs 225.63 crore on adex. On reducing the ad expenditure, Malhotra said,”Whenever luxury is available in terms of margins, at that time you want to invest money behind advertising to grow your brand. But when the luxury of spend is not there, then you have to have a balanced approach between margins”.
Dabur reduces ad spend by 7.2% in Q3, net profit sees marginal rise to Rs 515 crore
Similar to Dabur, Hindustan Unilever has cut its adex in Q3 FY 25. HUL’s consolidated spending on ads reduced to Rs 1,466 crore in Q3 FY 25 compared to Rs 1,593 crore in the corresponding quarter last fiscal. In the nine-month period (April-December), HUL has spent Rs 4,574 crore on ads and promotions, down 4.5 percent YoY. Notably, the consumer goods giant registered a 19 percent rise in profit to Rs 3,0001 crore in Q3.
HUL cuts ad expenses by 8% in Q3 FY25, profit surges to Rs 3,001 crore