FMCG giants anticipate volume-driven growth, slight inflation, post-monsoon surge in FY25

Leading FMCG makers expect a volume-led growth in FY25, with a revival in consumption supported by a lower inflationary environment, projections of a normal monsoon and good rabi crop.

Companies such as Britannia, Marico, Dabur, GCPL and HUL in their latest March quarter earnings also expect revenue growth in the new financial year as the deflationary cycle is over.

The companies were forced to slash prices as prices of major commodities had fallen, which had, in turn, impacted their topline and value growth in the last two quarters of FY24.

Besides, they expect a gradual uptick from the rural market, which contributes over one-third of FMCG sales in the country.

For Dabur “a volume growth will be the way forward” in this fiscal, said its CEO Mohit Malhotra in an investor call.

He remains optimistic about the gradual uptick in consumption trends in FY25 and expects a “mid-to-high single-digit volume growth” considering a normal monsoon, improving macroeconomic indicators, government spending and lower inflation.

“Till last year, we were at least having some price increase anyway and, now going forward, it's going to be mostly driven by volume across categories while we budget a 3% price increase, but price increase will be fairly limited in some parts of the portfolio while the rest will be driven by volume only for us. So we feel it will be mid-to-high single-digit volume growth…,” said Malhotra.

Britannia Industries Vice Chairman and Managing Director Varun Berry said FY25 “is a year of topline growth” and expects a double-digit volume growth post election and monsoon.

"Our outlook on this year is not deflationary. Our outlook on this year is slightly inflationary, which is a healthy inflation of 3%," he said during an investor call.

When asked about volume growth this year, Berry said he expects it to be “quite solid”. "Post-election, post-monsoon, we would be aiming towards a double-digit volume growth, for sure.

Godrej Consumer Products Ltd (GCPL) expects a “high single digit volume growth” this fiscal year from its India market and to step up profitability from its global markets.

In an investor presentation, GCPL MD & CEO Sudhir Sitapati said it has a three-pronged strategy for FY25 - premiumisation, efficiency and affordability.

The company, which owns brands as HIT, Cinthol and Good Knight has aspirations for a high single-digit growth on medium term and double-digit in the long term.

Marico, which owns brands like Saffola, Parachute, Livon etc, aims to “deliver healthy revenue-led earnings growth in FY25”.

The company, which reported 3% volume growth in the domestic market in March quarter, expects a “gradual uptick in the growth” of its core categories, against the backdrop of improving macro-indicators and forecast of a normal monsoon, it said.

Leading FMCG player HUL said it continues to see positive volume growth across most of its business.

It expects FMCG demand to improve gradually as forecast of above-normal monsoons and improving macro-economic indicators augur well, said HUL CFO Ritesh Tiwari in latest earnings call.

"If commodity prices remain where they are, we envisage price growth to plateau in mid-term and become positive in low single digits by end of this financial year. In this context, our focus remains on driving competitive volume-led growth across our business,” he said.