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.
