FMCG sector to see 7-9% revenue growth this fiscal: CRISIL Ratings

The fast-moving consumer goods (FMCG) sector is expected to see revenue growth of 7-9% this fiscal, according to a report released by CRISIL Ratings on July 6.

The expected revenue increase in FY 2024-25 will be supported by higher volume growth due to a revival in rural demand and a steady demand from urban areas. The estimated growth of the FMCG sector in 2023-24 was 5-7%.

The report said product realisation is expected to grow in single digits with a marginal rise in prices of key raw materials for the food and beverage (F&B) segment. However, the prices of key raw materials for the personal care and home care segments are likely to be stable.

CRISIL Ratings Director Rabindra Verma said, “Revenue growth will vary across product segments and firms. The F&B segment is expected to grow 8-9% of this fiscal, aided by improving rural demand. The personal care segment is likely to grow by 6-7%, and the home care by 8-9%.”

The FMCG players will continue to eye inorganic opportunities, which will help them expand product offerings, the report said. Sustained improvement in the rural economy, which depends on the monsoons and farm incomes, will be essential for generating steady demand, it added.