New Delhi [India], The fast moving consumer goods (FMCG) sector will witness 7-9 per cent revenue growth in the current fiscal year, says rating agency CRISIL in its report. Growth in the sector will be driven by higher volume, revival of rural demand and stable urban demand.
The report adds that product realizations are expected to grow modestly with slight increases in prices of key raw materials for the food and beverage (F&B) segment, while prices for the personal care (PC) and grooming segments of the household (HC) will remain stable.
The rating agency further added that premiumization and volume growth will widen operating margins by 50-75 basis points to 20-21 percent, although rising marketing expenses due to intense competition will limit further expansion. .
Product realization combines market requirements, technological capabilities, and resources to define new product designs and the necessary manufacturing and field support processes.
The 77 FMCG companies studied by the rating agency, which account for about a third of the sector's revenue worth Rs 5.6 lakh crore in the last fiscal year, highlight that the food segment and beverages accounts for almost half of the sector's revenue, and the home and personal care segments each account for a quarter.
Supported by improved monsoon, rural consumption volume growth is expected to reach 6-7% in fiscal 2025. Higher minimum support prices and increased government spending on rural infrastructure will also will contribute to rural growth.
Urban consumption volume growth is expected to remain stable at 7-8 percent, driven by rising disposable incomes and a focus on premium products.
Expressing optimism about the overall outlook, the report adds that revenue will benefit from modest 1-2 percent realization growth and a focus on improving premium offerings.
The food and beverage segment is expected to grow at 8-9 per cent, the PC segment at 6-7 per cent and the HC segment at 8-9 per cent, says Aditya Jhaver, director of CRISIL Ratings: "We expect volume growth of 6-7 per cent." in FY2025 from rural consumers (40 per cent of total income), supported by the expectation of a better monsoon benefiting agricultural production, and an increase in the minimum support price supporting agricultural income. Increased government spending on rural infrastructure, mainly through Pradhan Mantri Awaas Yojana. Grameen (PMAY-G) for affordable housing will contribute to greater savings in rural India, supporting their ability to spend more.”
The report adds that product realizations are expected to grow modestly with slight increases in prices of key raw materials for the food and beverage (F&B) segment, while prices for the personal care (PC) and grooming segments of the household (HC) will remain stable.
The rating agency further added that premiumization and volume growth will widen operating margins by 50-75 basis points to 20-21 percent, although rising marketing expenses due to intense competition will limit further expansion. .
Product realization combines market requirements, technological capabilities, and resources to define new product designs and the necessary manufacturing and field support processes.
The 77 FMCG companies studied by the rating agency, which account for about a third of the sector's revenue worth Rs 5.6 lakh crore in the last fiscal year, highlight that the food segment and beverages accounts for almost half of the sector's revenue, and the home and personal care segments each account for a quarter.
Supported by improved monsoon, rural consumption volume growth is expected to reach 6-7% in fiscal 2025. Higher minimum support prices and increased government spending on rural infrastructure will also will contribute to rural growth.
Urban consumption volume growth is expected to remain stable at 7-8 percent, driven by rising disposable incomes and a focus on premium products.
Expressing optimism about the overall outlook, the report adds that revenue will benefit from modest 1-2 percent realization growth and a focus on improving premium offerings.
The food and beverage segment is expected to grow at 8-9 per cent, the PC segment at 6-7 per cent and the HC segment at 8-9 per cent, says Aditya Jhaver, director of CRISIL Ratings: "We expect volume growth of 6-7 per cent." in FY2025 from rural consumers (40 per cent of total income), supported by the expectation of a better monsoon benefiting agricultural production, and an increase in the minimum support price supporting agricultural income. Increased government spending on rural infrastructure, mainly through Pradhan Mantri Awaas Yojana. Grameen (PMAY-G) for affordable housing will contribute to greater savings in rural India, supporting their ability to spend more.”