Urban slump hits FMCG firms

FMCG growth slows in Q3 as price hikes, weak winter, urban demand weigh on results, despite rural resilience.

- Suneera Tandon

Despite some pockets of resilience in rural markets and price hikes to combat inflation, India's consumer goods companies faced a challenging third quarter.

A delayed winter added to urban demand woes and inflationary pressures, and many consumer goods companies are expected to report low single-digit revenue growth and margin contraction for the October-December period. "The demand slump persisted in Q3FY25 despite festive concentration. Inflationary stress asks for price hikes that further affect demand. Expected respite from winter care offerings was also missing, given the delayed and weak winter," said Nitin Gupta, research analyst at Emkay Global Financial Services, in a sector preview report on 3 January.

"ITC, Marico and Bikaji are only players to report double-digit year-on-year revenue growth. Margins are likely to be weak due to inflationary stress, weak sales mix, lower operating leverage and need for sustained advertising," he added.