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FMCG companies are betting big on a volume-led growth revival in the coming months and said they have begun witnessing green shoots visible in terms of revival of rural consumption. This comes on the back of moderate inflationary pressures and expectations of better monsoons among other factors.
“Since the last three quarters, we have seen volume growth inching up sequentially from 3 per cent going to 4 per cent to 5 per cent. In Q1FY25, volume growth has been 5.2 per cent In the month of July also, we have not seen any slackening of volume growth and is picking up. So going forward, we expect sequentially in the coming quarters, volumes will pick up on the back of rural consumption inching up for us. So I expect the subsequent quarters to be better than our existing quarters,” said Mohit Malhotra, CEO, Dabur India in an analyst call post release of earnings for June quarter, said,
Players also said that the overall FMCG volume trends in India continued to witness gradual improvement on a 2-year CAGR basis led by rural consumption improvement. They also saw consumption pick up in non-food categories such as home and personal care segments.
Bharat factor
Talking about the operating environment witnessed during Q1FY25, Saugata Gupta, MD & CEO, Marico, said, “ During the quarter the FMCG sector continued to witness gradual improvement in demand trends with rural growth ahead of urban.... We expect volume trends to sustain the improvement trajectory aided by stable retail inflation, a healthily progressing monsoon season and the government’s budgetary allocation towards boosting the rural economy.” He added that elevated food inflation and spatial distribution of rainfall will be key factors to be monitored.
On Monday, on an analyst call, top management of Britannia Industries also noted that rural growth is starting to come back for the FMCG industry, which had been lagging urban growth rates for some time.The company added that the FMCG industry is poised for consumption-led growth in FY25 due to factors such as expectations of better monsoon and moderate inflationary conditions besides reducing unemployment.
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