Rural Demand Recovery to Drive FMCG Growth to 6-8% in FY26: Crisil

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According to Crisil ratings, the FMCG sector would mildly recover in FY26, and revenue growth is estimated to get 6-8%.

Breakdown of News:

  • In FY24 or FY25, the FMCG sector revenue growth was slow; the main reason was that rural demand was weak. Rural people’s income growth was slow; that’s the reason their spending was compressed.
  • Crisil believes that in FY26 demand would mildly improve, especially in rural areas, because their hope is monsoon will improve or government rural-focused policies will also impact.
  • Last some quarters, the FMCG company’s revenue increased because of a price hike, not because of sales.
  • Now the expectation is we see volume-based growth; in other words, people increase their spending power.
  • If rural income increases, then consumption would also improve.
  • If commodity prices are stable, then companies would maintain their margins easily.
  • Companies should launch new products and adopt a premiumization strategy to boost their growth.

Overall, the FMCG sector may witness a gradual recovery, but full demand recovery will only happen when the rural market strengthens. Companies will now focus on sustainable growth and margin stability.

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