CRISIL Predicts 7-9% Revenue Growth for FMCG Sector in 2025

The fast-moving consumer goods (FMCG) sector is expected to see a revenue growth of 7-9% in the current fiscal year, according to a report by CRISIL. This growth will be driven by higher volumes, a revival in rural demand, and steady urban demand.

The report highlights that product realisations will grow modestly due to slight increases in key raw material prices for the food and beverages (F&B) segment, while prices for personal care (PC) and home care (HC) segments will remain stable. Premiumisation and volume growth are expected to expand operating margins by 50-75 basis points to 20-21%, although rising marketing expenses due to intense competition will limit further expansion.

CRISIL’s study of 77 FMCG companies, representing about a third of the sector’s Rs 5.6 lakh crore revenue last fiscal year, shows that the F&B segment accounts for nearly half of the sector’s revenue, with Home and Personal Care segments each accounting for a quarter.

Rural consumer volume growth is expected at 6-7% in fiscal 2025, supported by better monsoons, higher minimum support prices, and increased government spending on rural infrastructure. Urban consumer volume growth is projected to remain steady at 7-8%, driven by rising disposable incomes and a focus on premium products.

Aditya Jhaver, Director at CRISIL Ratings, stated, “We expect volume growth of 6-7% in fiscal 2025 from rural consumers, supported by better monsoons benefiting agricultural production and a hike in minimum support prices supporting farm incomes. Higher government spending on rural infrastructure, primarily through Pradhan Mantri Awaas Yojana-Grameen (PMAY-G) for affordable houses, will aid higher savings in rural India, supporting their ability to spend more.”