The FMCG sector is poised for a 7-9% revenue growth this fiscal year, buoyed by increased volume, a resurgence in rural demand, and stable urban consumption, according to CRISIL. While the food and beverages (F&B) segment faces slight rises in raw material costs, prices in personal care (PC) and home care (HC) segments are expected to remain steady.
CRISIL’s analysis covers 77 FMCG companies, representing about a third of the sector’s US$ 67.07 billion (Rs. 5.6 lakh crore) revenue from the previous year. It highlights the F&B segment’s significant contribution, accounting for nearly half of total sector revenue, with Home and Personal Care segments equally sharing a quarter. Despite competitive pressures leading to higher marketing expenses, CRISIL anticipates operating margins to expand by 50-75 basis points to 20-21%, driven by strategies focusing on premiumization and volume growth.
CRISIL forecasts rural consumer volume growth at 6-7% in FY25, supported by favourable monsoon forecasts, higher minimum support prices, and increased rural infrastructure spending. Urban demand is expected to remain robust, with growth rates projected at 7-8%, driven by rising disposable incomes and consumer preferences for premium FMCG products. CRISIL remains optimistic, foreseeing incremental revenue growth from a 1-2% rise in product realizations and a strategic emphasis on expanding premium offerings.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
