FMCG sector to witness 7-9% rise in revenue this fiscal: CRISIL

economictimes.indiatimes.com:

FMCG) sector is expected to grow 7-9% this fiscal, slightly slower than the 8-9% clip of the past two fiscal years, said Crisil. Higher volume is expected to drive revenue growth, amid support from gradual recovery in rural demand. On the other hand, urban demand will see stable growth on a higher base. “After subdued volume growth in the past two fiscals at 1-3%, the sector is likely to record a 4-6% volume expansion this fiscal, supported by gradual recovery in rural demand, and steady urban demand. That said, any adverse impact of El Niño conditions on rainfall patterns this monsoon season will have a bearing on rural demand and remains monitorable,” said Anuj Sethi, Senior Director, CRISIL Ratings. Product realisations are foreseen range-bound — even moderating in a few categories — this fiscal because of price cuts in certain products where raw material prices have moderated. In contrast, revenue growth in the past two fiscals was driven by higher realisations. Lower raw material costs, primarily of edible oil, crude derivatives and chemicals, will help offset higher selling and marketing spend, leading to a 50-100 basis point improvement in operating margin to pre-pandemic levels of 20-21%, compared with consecutive years of erosion.

Godrej Consumer Products estimates double-digit Q1 sales growth

A CRISIL Ratings study of 76 FMCG companies, which accounted for about 35% of the estimated Rs 5.2 lakh crore revenue of the sector last fiscal, indicates as much. In its quarterly earnings update on Wednesday, Godrej Consumer Products said overall consumer demand remained steady as seen in the previous few quarters in India. «Our organic business continued to deliver robust performance with