Homegrown firms in the fast moving consumer goods (FMCG) sector have outpaced many multinational companies in growth and market cap because of better consumer connect, inorganic growth and entry into global markets, says a report. "Our study of FMCG companies in India over 10 years shows that domestic firms have outstripped many MNCs in growth and market cap. Domestic FMCG companies have, over the years, grown from single-product companies to multi-product, multi-category firms," said the AnandRathi Institutional Research report. "Their margins and return ratios have improved. They have used steady cash-flows to invest in products and distribution to drive growth," it said. Domestic FMCG companies' revenues have registered a 21 per cent CAGR over 10 year from fiscal 2005-06 to 2014-15, while their profits have come at a 24 per cent CAGR. The listed FMCG MNCs have, during that period, registered a lower 13 per cent CAGR in revenue, while their profits have come at a 14 per cent CAGR, it added. It further said: "Domestic FMCG players have grown their product portfolios, from niche offerings such as chyawanprash to more mainstream offerings such as skincare products and beverages." Identifying reasons for better growth reported by domestic FMCG companies, the report said four 'I's driving growth for domestic companies. "Better India-consumer connect, innovation, inorganic growth and international forays have been the prime growth drivers for domestic firms. Barring innovation, most domestic firms have been able to leverage the other three 'I's far better than MNCs," it added. Report said that in the past 5-10 years domestic FMCG firms' margins have grown faster than those of MNCs. "This has been assisted by a better sales mix, scaled-up benefits and greater cost controls. We expect the margin gains to persist, especially for small and midcap FMCG operators, which have yet to gain from the scaled-up benefits," it added.