FMCG: After decade-low volume performance in Q4, worst yet to come

Q4 was weaker than demonetisation and GST periods, and June quarter is expected to see further pain despite hopes from better rural demand

Although the fast moving consumer goods (FMCG) sector is in relatively better shape, it could not escape the pain arising from Covid-19-led disruptions. Average volumes have fallen to decade-low levels in the March 2020 quarter (Q4FY20), and the April-June (Q1FY21) period is likely to be even worse. Marico's update of June quarter, wherein the company expects volume decline in low-teens, provides an indication. 

In Q4FY20, average volume of eight FMCG companies declined by about 12 per cent amid supply chain disruptions.

According to Vishal Gutka, vice president at PhillipCapital, “While volume de-growth in Q4 was mainly due to supply chain issues, which