Muted Consumer Demand Could Weigh on FMCG Volumes in March Quarter
India’s fast-moving consumer goods (FMCG) sector may report subdued volume growth for the January–March quarter, as weak rural demand and ongoing price cuts in staples continue to pressure margins and toplines. Industry analysts suggest consumption has yet to pick up meaningfully, particularly in rural markets, which account for around 35% of FMCG sales.
While urban consumption remains relatively stable, rural markets are still recovering from inflationary headwinds despite some easing in input costs and improved purchasing power. According to analysts, categories such as packaged foods, home care, and personal care have seen limited growth triggers. The sector is expected to post mid-single-digit volume increases at best, with several companies likely to report flat or modest growth year-on-year.
Leading brokerage ICICI Securities noted that overall demand environment remains weak and volume growth trends across players are likely to stay muted. Price hikes—particularly in food and household items—had been rolled back in 2023, further impacting value growth across the sector. As a result, several firms like Hindustan Unilever (HUL), Dabur, and Marico may see value growth primarily driven by pricing adjustments rather than underlying volume expansion.
HUL, considered a bellwether for the sector, is expected to report flat volumes or marginal growth. Analysts estimate the company might post 1–2% value growth, with recovery in rural zones remaining “slow-paced.” Marico is similarly projected to post low single-digit volume gains, while Godrej Consumer Products could report slightly better numbers due to innovation-led strategies and international market performance.
Notably, discretionary categories such as skin care and premium personal care are showing early signs of recovery, driven by improved urban consumption. However, mass-market staples like soaps, detergents, and edible oils continue to experience volume challenges, especially in Tier 2–4 cities.
Industry watchers say sustained recovery in rural demand is critical to broader FMCG revival. With food inflation in check and a normal monsoon forecast, analysts are cautiously optimistic about a gradual rebound in the coming quarters. Companies are also increasingly focused on driving efficiencies and mix improvements to offset sluggish volume and value trends.
Until then, the sector’s near-term outlook remains relatively tepid, with value growth depending more on pricing levers