India’s consumer goods industry could post its slowest pace of revenue growth in a decade and a half this financial year, Credit Suisse said, even as category leaders Dabur and Godrej Consumer sounded more optimistic about sales revival in the second half of FY20. Liquidity constraints and lower farm incomes will likely affect revenues at India’s leading consumer companies, which Credit Suisse said had harnessed savings from the GST rollout and fuel costs to expand operating margins and earnings over the past few years. “Despite the slowdown over FY16-19, FMCG companies grew their earnings faster by expanding margins from levers like the fall in crude prices and GST savings,” Credit Suisse said in a report on the consumer sector. “We expect 2Q and 3Q FY20 to see a further slowdown in revenue growth of our coverage universe to about 5%. This will make FY20 the slowest year of growth for FMCG in 15 years. The last period of such low growth was 2000-03.” The BSE FMCG index has declined 7.4% in 2019 so far, while the broader Sensex has gained 1.4%.

(Economic Times)