FMCG firms seek respite in 2025

For analysts, investors and stakeholders, the country’s Rs 5-lakh-crore FMCG market has been a dependable industry that delivers consistent returns year after year. The year ending 2024, however, saw the ‘defensive’ FMCG market crack open as demand challenges, notably, in urban areas, hurt overall growth rates. This is even as rural areas saw a revival in demand on the back of good monsoons and a strong harvest this year. It isn’t helping that inflation in both food and non-food is getting sticky, forcing companies to consider price hikes in the future.

While most players are hoping for a turnaround as early as April of 2025, the December quarter of 2024, like much of the previous three quarters, may not provide any respite for firms at the moment, experts say.

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Godrej Consumer (GCPL) said it expected flattish underlying volume growth and mid-single digit sales growth for the quarter due to subdued demand conditions, notably in soaps and household insecticides in the December quarter.

Also Read Industry should strategically realign, support MSMEs: Sitharaman FMCG companies count on urban revival by FY26 A weak Q3 in making: Godrej Consumer Products raises red flag on margin, volume growth; Find out why Financial services drive bulk of MobiKwik’s growth

“The surge in palm oil and derivatives prices to the extent of a y-o-y rise of 20-30% has impacted the soaps category, which represents one-third of our standalone business revenue. To partly offset the cost hikes we have taken price increases, reduced grammage of key packs and reduced various trade schemes,” GCPL said.

It also added that delayed winters in the north and cyclones in the south had hurt the household insecticides business, which also constituted a third of its standalone revenue. 

GCPL did not provide an update of its consolidated business operations for the December quarter.

While peers such as Dabur India, Marico and Adani Wilmar are expected to release their Q3FY25 quarter updates in the near future, in a recent conversation with FE, CEO Mohit Malhotra had indicated that the period remained challenging from a demand and sales perspective.

“Demand has been weak in the December quarter.

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