FMCG firms optimistic on demand outlook; expect easing input costs to support margins

Leading FMCG makers have expressed optimism on consumption trends, growth prospects, and margin improvement for the current fiscal, even as they continue to monitor inflationary pressures and the potential impact of El Niño-induced weather volatility.

Demand conditions remained resilient, supported by steady economic activity, while easing commodity prices are expected to recover margins progressively in the coming quarters, said fast-moving consumer goods (FMCG) companies in their respective first-quarter business updates.

Companies like Dabur India, Godrej Consumer Products Ltd (GCPL) and Marico have reported strong business momentum in the June quarter and are optimistic over consumption trends for the rest of FY27, despite inflationary pressures, commodity volatility and geopolitical uncertainties.

Marico expects its consolidated revenue to grow in the early twenties, while GCPL expects to achieve high-teens growth. Similarly, Dabur also expects double-digit growth in consolidated revenue and profit after tax for the quarter ended June 30, 2026.

The markers indicated broad-based growth across domestic and international markets, supported by resilient consumer demand, improving rural sentiment and continued strength in emerging channels, such as e-commerce and quick commerce.

FMCG companies also raised their concerns over elevated input costs and sourcing challenges during the period.

GCPL said input costs remained elevated through most of the April-June quarter, but have started easing in the closing weeks of the period.

“On the commodity front, input costs remained elevated through most of Q1, broadly within the cost impact ranges outlined in our previous update. Encouragingly, costs have begun to ease in the closing weeks of the quarter,” said the Godrej Industries Group (GIG) group firm.

The company said it expects margins to recover progressively during the year through calibrated pricing actions, cost-savings initiatives and media optimisation efforts.

“Our response has been consistent with our established approach to navigating commodity cycles, calibrated pricing actions, strong delivery on cost-savings programmes, and prudent media optimisation, and we expect margins to recover progressively through the year,” said GCPL, which owns popular brands such as Good Knight, HIT, Ezee, Cinthol and Godrej No 1.

However, it remains “mindful” that El Nino conditions can heighten “weather volatility across our key markets” with the potential to disrupt agricultural output and rural demand. 

GCPL said its geographically diversified sourcing network and portfolio provide resilience against such risks, and it does not foresee any major impact.