Indian firms look for cost savings as rupee falls

NEW DELHI, Nov 24 (AsiaPulse) - Indian FMCG firms are turning to efficient cost management and local procurement of raw materials to offset increasing pressure on margins due to the weakening of the rupee that has spiked input costs. Having already taken a series of price hikes this year, the firms have little room to take a similar step and are worried that their bottomlines could be hurt.

"The impact of this depreciation can be mitigated through better cost management and feasible pricing changes. The extent of mitigation will depend upon the ability of the respective business to cut costs or take up prices," Marico Ltd (BSE:531642) CFO Milind Sarwate told PTI.

He, however, hastened to add that FMCG firms cannot be oblivious to the expectations of the consumers in order to sustain demand over the foreseeable future.

"If that has to be tapped unhindered, businesses cannot pass on all the forex-led cost push on to the consumers. Therefore, this forex push could hurt bottomlines too," Sarwate said.

Emami (BSE:531162) Director Aditya Agarwal said input costs have already gone up as the rupee weakened against the dollar.

"We are exploring ways on how we can use raw materials from India instead of imp