FMCG Sector Revenue May Be Marginally Higher In FY26

Thu, 20 March 2025

15:35

India's fast-moving consumer goods (FMCG) sector should see revenue rebound in FY26 aided by a gradual recovery in urban demand and steady rural demand, according to a report by credit-rating agency Crisil.

The report says the FMCG sector should see revenue rebound by 100 to 200 basis points (bps) to 6 to 8 per cent in FY26 up from an expected 5 to 6 per cent in FY25 as volume rises 4-6 per cent.

"Traditional FMCG companies will continue to target the acquisition of direct-to-consumer (D2C) brands, increase adoption of digital channels, and introduce more lower-price packs and products amid rising competition to support volume growth, which has remained subdued over the past few financial years," the report said.

Crisil added that another 2 per cent revenue uptick should come from FMCG companies partly passing on the impact of inflation in key categories such as soaps, biscuits, coffee, hair oil, and tea.

Pricing actions will be driven by elevated prices of key inputs such as palm oil for all three FMCG segments -- food and beverage, personal care, and home care as well as coffee, copra, and wheat.

Crisil expects operating profitability to stay flat but healthy at 20 to 21 per cent in FY26, after a 50 to 100 bps decline in FY25, and the agency expects the credit profiles of FMCG companies to remain stable.

Sharleen Dsouza, Business Standard

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