Amid Covid-19 second wave, headwinds visible for India's FMCG sector

Second wave and weak sentiment are likely to impact consumption

Headwinds are apparent for the FMCG sector, even though March quarter (Q4) results met expectations or beat them due to a strong burst of consumption in January and February 2021. However, the second wave of the pandemic makes it hard to extrapolate the results.
 
Economic conditions and sentiment have changed sharply. The second wave will affect Q1FY22. It may also have long-term negative effects on supply chains, with disruptio­ns caused by curfews, lockdo­wns, etc, not to mention high mortality and unprecedented pressure on health care.
 
Unlike in the first wave, rural infection rates are very high in 2021.