FMCG turnaround

The fast moving consumer goods (FMCG) companies are working up a lather once again after a prolonged lull in sales growth, if the latest figures from AC Nielsen is anything to go by. There has been a sharp uptick in sales helped by a big jump in advertising spends across product categories.

Total sales growth for the sector reached an eight-month high of 14 per cent in April year-on-year. The sector had been buffeted by a combination of a spike in raw material prices and downtrading by consumers in 2009 during the slowdown. Analysts say the worst is over.

Says Anuj Bansal, Research Analyst, DSP Merrill Lynch (India): "There will be a strong recovery in growth in the second half of the current year, led by price hikes, higher volume growth as food inflation subsides and a normal monsoon supporting rural growth."