Price hikes likely to drive FMCG firms' revenue in April-June quarter

Commentary to watch out for from consumer companies includes rural demand, overall demand impact due to high commodity costs, and volume growth

Fast-moving consumer goods (FMCG) companies in the April-June quarter are expected to show higher revenues on the back of price increases. However, volumes are expected to remain under pressure because rising inflation is affecting demand. Discretionary spend was higher in the quarter than staples.

Rural demand for FMCGs was under pressure during the quarter. Godrej Consumer Products said in its quarterly update that rural markets witnessed slow growth compared to urban.

Motilal Oswal said in its preview note on the sector sales growth in the quarter would largely be led by price hikes because volumes for most categories remained affected by grammage