Marico Managing Director and CEO Marico said that while overall demand may not be immediately ahead, the volume growth of the fast-moving consumer goods industry in India is expected to be slightly higher in 2025-26.
“Consumption is much better than summarizing the listed company in some way,” Gupta said in an interview with MINT.
“Inflation is slowing and urban consumption will improve. So the overall growth of the industry will certainly be slightly higher than last year. You may not have a huge recovery, but it will certainly be better than last year,” she said.
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India’s retail inflation rose 3.16% year-on-year in April, the slowest rate of lower food prices in six years. As inflation linked to the consumer price index remains below 4% for three consecutive months, some economists expect the Reserve Bank of India’s monetary policy committee to lower interest rates again in June, which in turn will stimulate overall consumption and economic growth.
Food inflation fell to 1.78% in April from 2.69% in March, 3.75% in February and 4.83% a year ago hovered after 7% between November 2023 and June 2024.
Gupta expects good monsoon rainfall to be used in combination, government focus on rural infrastructure and minimum support prices for crops to meet rural demand.
He added: “We expect rural demand to be stable. If the urban demand I foresee will improve, then the overall batch growth of the (FMCG) industry this year will definitely be better than last year.”
Marico is also confident that it will provide double-digit revenue growth in the current fiscal year, which will help improve demand and distribution in rural and urban markets. Gupta said the company is also open to acquisitions that meet its adjacency standards and address portfolio gaps, especially in terms of health.
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Inflation softens in the second half of the year
According to Nielseniq, India’s fast mobile consumer goods industry reported an 11% year-on-year value increase in the March quarter (the last three months of the last three months of 2024-25), with prices rising by 5.6% as sales volumes increased by 5.1%.
Although overall inflation is easing, high edible oil prices keep staple baskets expensive, resulting in higher value growth. However, most consumer goods companies show a gradual improvement in urban demand in the future.
Inflation based on the wholesale price index was 0.85% at its 13-month low in April as food and energy prices shrank.
Earlier this month, Godrej Consumer Products Ltd said the demand for packaged goods was optimistic. “We are optimistic about consumer demand in the next 12 months for various reasons,” CEO Sudhir Sitapati told media staff. “Last year, the effect of El Nino was basically occupying food prices in India. Food price inflation has a direct impact on consumption of fast-moving consumption. Now that El Nino has reversed, food price inflation has declined in the January-March period.”
In addition, the coalition government’s decision on lowering personal income taxes and welfare schemes introduced in the past year should start to bear fruit, he added.
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Marico is facing inflationary headwinds for sale of edible oils, hair oils and personal care products, as edible oil prices remain high in the second half of 2024-25.
Gupta expects inflation will continue to exist in the first half of the current fiscal year due to the basic impact of price increases in the previous year. However, he expects that the second quarter will begin to soften around the second quarter (using coconut oil). “Price inflation will be much lower in the second half of the year,” he said.
Marico’s operating revenue rose 20% year-on-year to Rs 27.3 crore in the March quarter, with the basic volume of its operations growing by 7%. Profits increased by 7.8% ₹3.45 million. Marico’s volume grew by 5% in 2024-25. Operating revenue jumped 12.2% to ₹$1,083.1 billion reflects the price increase implemented by the company.
“Price increases are mostly going on. Inflation has been steadily falling; crude oil prices are broadly stable. Apparently, in the first half, there will be inflation due to the basic effects,” Gupta said. “As you know, in the second half, both copper and edible oil prices began to rise significantly. The first half will be inflation, but European tape will start to soften sometime in the second quarter.”
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