The Rs 1.2 lakh-crore fast moving consumer goods (FMCG) industry in India is expected to register double-digit growth both by value and volume in the second quarter of 2010-11. While the buoyant economy, bountiful monsoons, new product launches and sustained ad-spends are expected to drive steady volume growth, selective price hikes across categories to offset input cost pressures may lead to higher value growth for FMCG companies this quarter.

?We expect the industry to post steady top line growth of 17.3% y-o-y aided by robust volume growth and selective price hikes though the full impact of price hikes is likely to be felt only in the second half of FY 2011,? said Anand Shah, senior research analyst with Angel Securities.

The industry had posted a 13.8 % top line growth in Q2 FY 10.

According to Shah, Godrej Consumer is expected to post the highest top line growth this quarter aided by first quarter of full consolidation of its recent acquisitions. ?Among others, Dabur, Nestle, ITC and GSK Consumer are expected to post strong top line growth this quarter,? he added.

Sharing similar views, Nitin Mathur, a research analyst with Edelweiss Securities said strong volume growth (10-18% y-o-y) is expected primarily from Dabur, Emami, Colgate, HUL, Marico and Asian Paints. ?In Q2, FY11, margins are likely to remain stable as price hikes during the quarter could offset raw material price inflation,? he added.

FMCG industry captains seem to share the optimism. Adi Godrej, chairman of the Godrej Group said, ?The growth rate is accelerated in the FMCG sector ? with good monsoon and rural economy. I think Q3 and Q4 of FY 11 will be highest growth quarters in FY 11.?

Aditya Agarwal, director of Emami, is upbeat about his company?s performance in Q2 FY11. ?I expect the industry to post better volume growth as compared to the last two quarters. I expect Emami to clock a 30% volume growth in Q2 FY 11,? he added.

Sunil Duggal, chief executive officer of Dabur India also expects the Indian FMCG sector to register a robust volume growth in Q2 FY 11. ?However, margins could remain under pressure because of high input costs,? he said. Echoing similar views, industry analysts point that margins will be under pressure because of pricing corrections in certain categories like detergents.

?Overall, the industry is expected to post a double digit growth this quarter,? said a Mumbai- based analyst. Nikhil Vora, managing director of IDFC Securities, predicts the industry will continue to register a robust double digit growth in September quarter of FY11. ?I expect the industry to register a 13% volume growth as compared to last year. In fact, the industry has been performing well in the last five quarters,? he added.