Why FMCG firms need to be agile and nimble

Looking at growth data of the Fast Moving Consumer Goods (FMCG) sector, it is evident that the companies need not only to transform to address demand better but also be agile and nimble in terms of category development efforts and innovations, says an Emkay Research report. Going ahead, FMCG leaders remain optimistic about growth recovery, it says.

"We have a similar view and prefer GCPL, Dabur, ITC and Emami in our coverage universe. We maintain ADD on HUL, Britannia, and REDUCE on Marico while retaining SELL on Colgate. FMCG sector volume lags real GDP growth over a specific period, usually a year or a quarter, after adjusting for inflation or changes in the general price level earnings driven by margin. India remains a consumption-driven economy, where spending per household has been tracking real GDP growth in the last 15 years. However, volume growth for the FMCG sector has lagged, with only ~3 per cent growth," says the report.

Read the Emkay Research report here.