Summary:

India's FMCG industry remained resilient in Q1 FY25, with growth fueled by increased rural demand. Despite challenges such as heatwaves, competition, and upcoming elections, businesses achieved mid- to high-single-digit sales growth. Rural markets outperformed urban ones due to volume recovery, a normal monsoon season, expanded rural distribution, and region-specific product launches.

Gross margin growth slowed in Q1 FY25 due to high base margins and fluctuating raw material costs, especially for agricultural commodities. Increased advertising expenses to regain market share also affected EBITDA margins. Despite these challenges, strategic investments are expected to drive long-term growth. The sector remains optimistic, with potential in underserved areas and rising rural demand. Companies need to manage raw material volatility, but the FMCG sector continues to present attractive investment opportunities.

Source: IBEF

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