India Inc: Volume Growth Set to Rebound Next Fiscal

Indian consumer goods and appliance manufacturers are optimistic about a volume-led growth rebound in the upcoming fiscal year. This positive outlook is primarily driven by decreasing inflation and recent Goods and Services Tax (GST) rate reductions, which are expected to make products more affordable and stimulate household demand.

Following several quarters where revenue growth was largely attributed to price increases and premium product sales, companies now foresee a shift. They expect volume growth to surpass value growth, signaling a significant recovery in the mass-market segment. This volume-led expansion is considered more challenging yet more sustainable than growth driven solely by price.

Macroeconomic indicators and consumer sentiment are showing signs of improvement, suggesting the next fiscal year will be stronger than the current one. Despite a slow recovery observed so far this fiscal year, with FMCG volume growth moderating, momentum is projected to accelerate through the calendar year.

Companies in the consumer durable sector, including those producing air conditioners and refrigerators, anticipate a surge in demand this summer. This expected upturn is bolstered by a weak comparative base from the previous summer, pent-up demand, and an overall improvement in consumption patterns.

To further tap into price-sensitive consumers and expand volumes, many companies are renewing their focus on entry-level product models. This strategic shift marks a departure from the recent trend where growth was predominantly fueled by mid- and premium-segment offerings, signaling a broader move towards volume-led expansion.