FMCG revenue growth to inch up 6-8% in FY26 on gradual demand revival: Crisil

India’s fast-moving consumer goods (FMCG) sector is expected to see a mild rebound in FY26, with revenue growth projected to rise to 6-8% from a more modest 5-6% estimated in FY25, according to a Crisil Ratings report.The improvement is expected to come from a gradual uptick in urban consumption and stable rural demand, supported by selective price increases in key categories.

A 4-6% volume growth is projected as urban consumers benefit from moderating food inflation, easing interest rates, and tax relief measures outlined in the Union Budget. Meanwhile, rural demand is expected to remain stable, supported by sustained government spending on welfare schemes and a hike in minimum support prices.

Crisil Ratings noted that pricing actions will contribute around 2% to revenue growth as FMCG firms pass on higher costs in categories such as soaps, biscuits, coffee, hair oil, and tea. Input costs for key raw materials—including palm oil, coffee, copra, and wheat—remain elevated, influencing pricing decisions.
“Increasing competition from regional and digital-first brands has pushed traditional FMCG firms to adapt,” the report said. To sustain growth, companies are focusing on acquiring direct-to-consumer (D2C) brands, expanding digital sales channels, and introducing smaller, lower-priced packs to attract cost-conscious buyers.Also read: FMCG sector seeks relaxation in plastic reuse & recycling norms, cites capacity crunch as a hurdle

“Moderating food inflation, easing interest rates, and tax relief measures in the Union Budget will encourage urban demand recovery, while rural consumption will be supported by welfare schemes and higher minimum support prices,” said Anuj Sethi, Senior Director, Crisil Ratings.

Traditional FMCG firms are also recalibrating their product strategies to keep up with changing consumer behaviour. “Quick commerce now accounts for ~30% of the e-commerce channel, prompting companies to launch exclusive packs for these platforms,” Aditya Jhaver, Director, Crisil Ratings added

Despite these shifts, operating profitability is expected to stay flat but healthy at 20-21% in FY26, after a 50-100 basis point decline in FY25. Crisil Ratings’ study of 82 FMCG companies, which account for a third of the sector’s estimated ₹5.9 lakh crore revenue, suggests that credit profiles will remain stable.

While growth prospects look better for FY26, input costs, monsoon trends, and household spending patterns will be key factors to watch in the coming quarters, Crisil Ratings added.