New Delhi, Feb. 25 -- FMCG companies have reported muted performance in the third quarter of FY25 due to weakness in the urban market owing to increased competitive intensity and subdued demand environment. However, rural recovery continues to grow faster owing to easing inflation, increased government spending, and higher MSP.

Companies have highlighted that volume growth is (especially in staples) likely to remain under pressure for the next 1-2 quarters and pick-up expected only from Q1FY26. On the Gross margins front, most companies reported subdued performance due to higher key raw material prices such as agri commodities.

Axis Securities believes that the FMCG companies are on a structural growth path, with several categories stil...