Shares of FMCG behemoths Hindustan Unilever, Nestle, ITC and Dabur and Godrej Consumer tanked in trading on Monday after the last-mentioned published a quarterly update indicating ‘subdued demand’.

The share price of Godrej Consumer plunged 10% to ₹1,120.10. HUL was lower by 3.63% at ₹2,394 while Dabur had slipped 3.5% to ₹505.45 and Nestle was trading about 2% lower at ₹2221.50 on the BSE at 11:12 am. ITC had gone a tad lower, by 0.5%, to ₹469.50.

In a quarterly update that came before the end of the October-December quarter, Godrej Consumer disclosed to the exchanges that the increase in palm oil and deritvatives prices by 20-30% had impacted the soap segment.

“To partly offset the cost increases we have taken price increases, reduced grammage of key packs and reduced various trade schemes. Such pricing actions typically have minimal impact on category consumption but do result in reduced inventory across wholesale and household pantry.”

However, the company added that “historical patterns indicate a normalisation in volume growth following price stabilisation, which we anticipate occurring in the next few months.“

The company also pointed out that weather conditions had not been supportive due – with delayed winters in the North and a cyclone in South India – to the Home Insecticides (HI) segment, contributing about a third to its standalone business. “This has impacted HI category growths in the current quarter.”

In its note, Godrej Consumer added: “These are exceptional situations in the standalone business that the management believes are transitionary and not structural. Hence the management remains focused on navigating these near-term challenges while maintaining strategic investments for long-term growth as these negative trends are likely to persist for a few months”.

(This is a developing story)