Indian FMCG market to grow

15 April 2009

NEW DELHI: The Indian FMCG market is set to post an increase in profit of 15% in the final quarter of the fiscal year, with revenues up 14%, and margins consistent at 13.6%, the ET Intelligence Group forecasts.

Based on predictions from brokerages and its own research, ETIG argues that consumer demand "still holds strong in urban as well as rural areas", although it also predicts "high-end consumer products are likely to witness some shrinking in volumes."

A report by Angel Broking similarly suggests that "higher advertising spend, product launches and increased level of promotions" should help the FMCG sector "sustain modest volume growth" in the last quarter of the current fiscal year.

However, the company is concerned that the slowing rate of economic growth in India and declines in income levels may result in "moderation in consumer spending in the ensuing quarters."

As such, Angel is "bullish on the overall prospects of the Indian FMCG sector," and it states that other industries are "better placed to combat the economic slowdown and sustain margins."

The Indian FMCG sector is valued at around 110,000 crore rupees ($24.1bn; €18.1bn; £16.2bn) by Datamonitor India, which expects this figure to expand to 185,000 crore rupees by 2014.

Data sourced from Financial Chronicle/Economic Times; additional content by WARC staff