Domestic consumer goods companies expect market growth rates to improve by FY26 as the urban slowdown pangs may subside by then, executives at top FMCG firms said. Companies also expect mid-single digit price-led growth to drive the overall topline growth. This would come after multiple quarters of pricing decline due to benign commodity costs on the non-food front in the current fiscal.
“FY26 should be better than FY25 as the overall consumer goods market is likely to stabilise, especially in urban areas, as slowdown concerns reduce. There is likely to be some pain visible in the December and March quarters of FY25 as demand has been weak. After that, market growth rates, both in FMCG as well as paints, should improve, led by urban and rural areas,” Abhijit Roy, MD & CEO, Berger Paints, said.
Roy was speaking on the sidelines of the CII National FMCG Summit held in Mumbai on Wednesday. His views were echoed by companies such as Pidilite, Britannia and ITC.
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“The urban market, basically the lower end, has slowed in part because of food inflationary concerns. But the upper end of the urban market is growing, which is a good sign,” Rajneet Singh Kohli, CEO & executive director, Britannia Industries, said.
Market research agency NielsenIQ has indicated that FMCG market growth rates may improve in FY26 on the back of a low base effect as well as stronger rural growth rates, though some recovery in urban demand is also likely by then.
Kantar, on the other hand, has said that demand in the urban middle class is likely to remain subdued in FY26 as high inflation, notably in food, will hurt real incomes.
Kantar does indicate that rural areas are witnessing a surge in spending in small indulgences such as beverages and convenience products after a prolonged slowdown in the hinterland.
Sudhanshu Vats, MD-designate, Pidilite Industries, said that he saw no big challenges in the medium-to-long term for the FMCG market.
“Some segments and organisations could see some near-term challenges. But by and large, there are no big challenges on the horizon. While India’s upper middle class will continue to grow in the medium term,
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