FMCG likely to bounce back in 12-18 months: Godrej Consumer MD

Godrej Consumer Products said there has been a deviation over the past two years with volume growth of the fast-moving consumer goods market lagging gross domestic product (GDP) growth. The company expects easing food inflation, normal monsoon and pay commission in 2025-26 will boost demand.”FMCG volume growth peaks GDP growth. So if GDP growth is 6%, median volume growth in FMCG should be 7-7.5%. Over the last two years, it has been 4%. So there has been a 2-3% deviation, which I think is a short-term deviation, and it should come back,” said Sudhir Sitapati, MD, Godrej Consumer Products, guiding a mid-high single-digit volume growth in this financial year.

The maker of GoodKnight and Cinthol reported a 4% increase in volume sales during the March quarter and 6% in 2024-25 over a two-year compound annual growth rate (CAGR).

The company said factors such as lower food inflation, income-tax reduction and government’s welfare schemes will help sales growth over the next 12-18 months.

“There’s also a pay commission, which is due in the next 12 months. We have seen in the past that every time there’s a pay commission increase, FMCG does well. So, these are the reasons why, over the next 12 to 18 months, I feel like FMCG may see some sort of revival from where it is,” said Sitapati.

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In the past few years, Godrej Consumer Products entered the deodorants segment through the acquisition of Park Avenue and Kamasutra, expanded its organic play in the fast-growing liquid detergent segment with Godrej Fab and tapped into the growing pet food market through a new subsidiary, Godrej Pet Care, that recently launched pet food brand Ninja.The company said these categories have a multi-decadal growth runway with lower per capita consumption compared to other markets it operates. For instance, spending per capita in Indonesia is three times higher in deodorants and seven times higher in perfumes compared to India. Besides, the body wash and liquid detergents category has grown at 30-35% CAGR over two years.



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