Mumbai, Feb. 23 -- The Indian Fast-Moving Consumer Goods (FMCG) sector is showing a significant recovery, with the consumer staples coverage universe of Centrum Broking reporting a sharp sequential pick-up in top-line growth from 2% year-on-year in Q2 to 7.5% in Q3. This growth was largely driven by a volume increase of 5.4% excluding ITC, signalling a "silver lining" for the industry after several years of growth and margin challenges.

According to the report the industry has seen early signs of a pick-up in demand due to favourable macros such as moderating inflation, a favourable monsoon, and a healthy crop outlook, alongside government initiatives like GST rationalisation and income tax cuts.

While the third quarter experienced some...