New Delhi: The fast-moving consumer goods (FMCG) sector is expected to witness 7-9 per cent revenue growth this fiscal, helped by higher sales volume and revival in rural markets, it said Crisil Ratings in a report.
Urban consumer volume growth will also remain stable at 7-8 percent, supported by rising disposable incomes and continued focus on premium offerings from industry players, especially in the care segments. personal and home care, she said.
Additionally, the premiumization trend and volume growth will widen consumer goods companies' operating margin "by 50-75 basis points, up to 20-21 percent," she said.
"Margin expansion would have been higher had it not been for rising sales and marketing expenses amid increased competition between organized and unorganized players alike," the report added.
Product realizations in FY25 are "expected to grow in low single digits with a marginal increase in prices of key raw materials for the food and beverage (F&B) segment", however, prices of key raw materials for the personal care (PC) and home care (HC) segments are considered stable, it added.
The food and beverage segment accounts for almost half of the sector's revenue, while the PC and HC segments account for a quarter each.
In terms of revenue growth, the report adds that the consumer goods sector will also be supported by a modest realization growth of 1 to 2 percent "mainly due to marginal increase in prices" of some key raw materials of foods and beverages, including sugar, wheat, edible oil and milk. .
However, prices of most crude oil-based products, such as linear alkylbenzene and high-density polyethylene packaging, remain within a limited range.
"The focus on improving premium product offerings, especially in the food and beverage and PC segments, will also support the achievements," he said.
Crisil Ratings Associate Director Rabindra Verma said revenue growth will vary across product segments and companies.
"The food and beverage segment is expected to grow 8-9 per cent this fiscal, helped by improving rural demand, while the personal care segment will grow 6-7 per cent. The “Home care segment, which outperformed the other two segments in the last fiscal year, is expected to grow 8-9 percent in this fiscal year, led by continued premiumization momentum and steady urban demand.” , said.
Crisil has estimated that consumer goods growth for fiscal 2024 will be between 5 and 7 percent.
Urban consumer volume growth will also remain stable at 7-8 percent, supported by rising disposable incomes and continued focus on premium offerings from industry players, especially in the care segments. personal and home care, she said.
Additionally, the premiumization trend and volume growth will widen consumer goods companies' operating margin "by 50-75 basis points, up to 20-21 percent," she said.
"Margin expansion would have been higher had it not been for rising sales and marketing expenses amid increased competition between organized and unorganized players alike," the report added.
Product realizations in FY25 are "expected to grow in low single digits with a marginal increase in prices of key raw materials for the food and beverage (F&B) segment", however, prices of key raw materials for the personal care (PC) and home care (HC) segments are considered stable, it added.
The food and beverage segment accounts for almost half of the sector's revenue, while the PC and HC segments account for a quarter each.
In terms of revenue growth, the report adds that the consumer goods sector will also be supported by a modest realization growth of 1 to 2 percent "mainly due to marginal increase in prices" of some key raw materials of foods and beverages, including sugar, wheat, edible oil and milk. .
However, prices of most crude oil-based products, such as linear alkylbenzene and high-density polyethylene packaging, remain within a limited range.
"The focus on improving premium product offerings, especially in the food and beverage and PC segments, will also support the achievements," he said.
Crisil Ratings Associate Director Rabindra Verma said revenue growth will vary across product segments and companies.
"The food and beverage segment is expected to grow 8-9 per cent this fiscal, helped by improving rural demand, while the personal care segment will grow 6-7 per cent. The “Home care segment, which outperformed the other two segments in the last fiscal year, is expected to grow 8-9 percent in this fiscal year, led by continued premiumization momentum and steady urban demand.” , said.
Crisil has estimated that consumer goods growth for fiscal 2024 will be between 5 and 7 percent.
