Indian FMCG Firms to See Single-Digit Growth in FY25, Stronger Recovery Expected in FY26
India’s fast-moving consumer goods (FMCG) sector is headed for modest revenue expansion in FY25, with major players projected to post mid to high single-digit growth. Soft rural demand, erratic monsoons, and an unusually high base from FY24 are key factors tempering expectations, according to insights from a recent Crisil Ratings report.
Volume growth is forecast to remain steady, driven largely by stable pricing and intensified distribution efforts in rural markets. However, overall value growth will remain muted due to the normalization of inflationary pressures and fewer price hikes compared to previous years.
“Revenue growth will remain in single digits for the second consecutive fiscal year, following a 7-9% uptick in FY24. In FY25, growth is expected to hover around 5-7%,” said a Crisil Ratings spokesperson. In FY24, value growth was buoyed by increased volumes and selective price hikes amid fading inflation. However, subdued rural consumption and lower price-led growth will weigh on FY25 performance.
The sector is facing headwinds from inconsistent rainfall patterns and election-related uncertainties, which may delay recovery in rural cash flows. About 36% of FMCG demand stems from rural India. While urban demand continues to show resilience, meaningful rural revival is expected only after mid-FY25, contingent on stable macroeconomic conditions and a normal monsoon.
Segment-wise Outlook
The food and beverages category, which comprises 50% of sector revenue, is anticipated to grow steadily, supported by volume gains from distribution expansion and increased penetration. On the other hand, the personal and home care segments may face subdued growth, impacted by tapering price hikes and soft discretionary spending in non-food sectors.
Despite the short-term slowdown, profitability for FMCG firms remains on solid ground. Crisil forecasts EBITDA margins to expand by 100-150 basis points in FY25, thanks to softening input costs, operational efficiencies, and product portfolio premiumization. This trend is expected to support a stronger revenue rebound in FY26.
While FY25 presents a challenging landscape for Indian FMCG players, companies are laying the groundwork for long-term strength through deeper rural outreach, product innovation, and cost optimization strategies—factors