The FMCG industry expects a subdued low to mid-single-digit volume growth in the July-September quarter as weak macroeconomic conditions amid rising food prices and below-normal rainfall in some regions are impeding the recovery in rural demand. FMCG companies such as Marico, Dabur, and Godrej Consumer Products Ltd (GCPL) have reported that the recovery has been gradual, despite an improvement in consumption in the second quarter. The shift of the festive season to the third quarter has delayed offtake related to festivals. However, companies expect better gross margins sequentially as inflation moderates. The weak monsoon has affected rural demand, which has been under distress for the past few quarters. FMCG companies with a focus on urban markets and international operations are expected to have an edge. FMCG companies are optimistic about a better performance in the next quarter and second half of the year, with improved consumption trends in rural markets due to various factors including government spending and positive consumer sentiment.