JPMorgan’s Head-India Consumer Research, Latika Chopra has turned positive on India’s fast moving consumer goods (FMCG) sector over the last 5-6 months.

Chopra expects low single-digit volume growth for most companies and believes that pricing gains, absent over the past year and a half, will support revenue growth for staples.

“We are kind of gravitating towards volume growth for most FMCG companies moving from flattish to low single digit levels in the first half of FY25,” she said in an interview with CNBC-TV18 on the sidelines of the JPMorgan India Investor Summit.

Chopra prefers staples rather than discretionary within the space as valuations are more reasonable.

Demand for staples companies has started to improve with volume growth gradually inching up. Rural consumption is catching up with the urban growth rates.

However, she cautioned that it’s still too early to gauge the durability and extent of the volume growth recovery for the staples sector. Festive sales will be closely watched, she said.

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Margins for the sector are largely going to hold out and the good news here is that companies are focusing on investing back to drive growth.

The earnings downgrade cycle for the FMCG sector, she believes, is largely behind and there are enough data points to suggest earnings upgrades in the coming months.

“The upcoming festive season will be key to gauge how discretionary demand plays out. There are key sectors like jewellery, paints, and durables, which will have some takeaways from how strong the festive season has gone up in the coming quarters,” she said.

According to her, the urban demand has been more or less stable.

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