Consumer products demand likely to grow in double digits in the next quarter

Mumbai | Kolkata: Demand for consumer products in the daily grocery, essentials, electronics and automobile segments could grow at close to 10 per cent and more in the March quarter, helped by a low base, the revival in rural growth and increased spending on hygiene, immunity and personal mobility, said company executives and analysts. This indicates that the trend of sharp, sequential quarterly revival that began after lockdown curbs were lifted will persist, they said.This bodes well for the economy and will shore up India’s turnaround story after GDP contracted 23.9 per cent in the March quarter and 7.5 per cent in the September quarter on a year-ago basis.Harvest IncomeFor instance, fast-moving consumer goods (FMCG), which saw volume growth at a three-year high in the September quarter, could expand by high single digits, driven by greater at-home consumption and consumers — both blue and white collar — with more disposable income having shifted to villages and small towns after the pandemic began. Rural demand will also be boosted by harvest incomes.79635212“The pace of recovery will depend on how Covid plays out in the next two-three quarters and when the vaccine comes. But the economic recovery is very good,” said Marico managing director Saugata Gupta, expecting 8-10 per cent volume growth for the second half of the fiscal year.The economy is expected to perform better in the third quarter, the finance ministry had said in its monthly economic report for November.“This V-shaped recovery, evident at the half-way stage of 2020-21, reflects the resilience and robustness of the Indian economy,” the ministry said in the December 3 report. “The fundamentals of the economy remain strong as gradual scaling back of lockdowns, along with the astute support of Aatmanirbhar Bharat Mission has placed the economy firmly on the path of recovery.” The RBI estimates FY21 GDP to contract 7.5 per cent.The consumer sector was in a slump in the FY20 March quarter, even before the pandemic took hold. The lockdown in late March stalled supply chains and manufacturing. Most companies posted a drop in sales as shops shut or were limited to selling essentials, while stocks weren’t replenished. That situation has reversed.Crisil revised its forecast for the FMCG sector on Tuesday to flat to low single-digit growth in FY21, thanks to a bump expected in the March quarter, compared with its earlier estimate of flat to a decline of 2 per cent for the year.

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