The more important signal is what is capping the upside. Tandon argues that FMCG’s structural growth ceiling has not changed much: volume growth is naturally limited, and performance still depends heavily on how much pricing power companies can exercise when commodity costs move. That makes the next phase less about demand revival alone and more about whether brands can pass on cost inflation without hurting volumes.

This is why the recovery should be read carefully. Margins are holding for now, but Tandon says the two variables to watch are forward commodity prices and pass-through ability. In other words, the sector is no longer fighting a demand slump as much as it is managing a fragile balance between affordability and profitability.

Why it matters:
FMCG is recovering, but this still does not look like a boom cycle. The companies that outperform may be the ones that manage commodity volatility and pricing discipline best while rural demand stays supportive.

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