In the next fiscal year, leading fast-moving consumer goods (FMCG) companies expect growth to be driven by volume, supported by easing inflation and stable commodity prices, which are reducing margin pressure.
In the December quarter, leading FMCG companies reported mid- to high single-digit volume growth. Industry leaders stated that the operating environment is becoming more favorable after several quarters of volatility.
Key inputs such as edible oils, wheat, copra, and surfactants have become more affordable, and with macroeconomic factors like GST rationalization, higher MSPs, and a good harvest season, FMCG makers anticipate sustained demand recovery.
Most companies have already implemented calibrated price increases earlier in the fiscal year and now expect growth to be driven by volume rather than pricing.
Some companies indicated that they may pass on some of the benefits of lower input costs to consumers through offers, increased grammage, or selective discounts, while maintaining caution regarding any residual impact of previous price increases.
With inflation cooling and consumer sentiment improving, companies such as Dabur, Marico, Britannia, HUL, and GCPL expect EBITDA margins to strengthen in the coming quarters. Industry leaders say that FY'27 is likely to be better than the current fiscal year, driven by stable commodities, easing cost pressures, and a broad-based recovery in consumption.
"As far as inflation is concerned, we saw significant inflation in Quarter 3. Inflation is now easing, as we see. Coconut oil prices are decreasing, SLES prices are decreasing, and vegetable oil prices are also decreasing. Therefore, the growth in the next year will be more volume-driven, not so much price-driven or value-driven," said Dabur India CEO Mohit Malhotra in the latest earnings call.
However, Malhotra also warned that price increases will continue, as some price increases that took place in September will also have a residual impact.
FMCG companies have also seen improvement in urban demand sequentially; however, rural continues to perform consistently, growing faster than urban areas.
Another major FMCG company, Marico, also anticipates "gradual recovery in consumption, supported by moderating inflation, improved affordability following recent GST rate rationalization, higher MSPs, and a healthy crop sowing season."
"We believe these factors provide a favorable backdrop for demand improvement across both urban and rural markets in the coming quarters," said Marico MD & CEO Saugata Gupta.
The company, which owns popular brands such as Saffola, Parachute, and Livon, aims to maintain volume growth momentum even as pricing growth is likely to moderate over the next few quarters.
"With input costs easing and margin pressure subsiding, we expect progressive improvement in operating profit growth rates over the coming quarters," said Gupta to investors in earnings calls.
Furthermore, Marico stated that it will pass on some benefits to consumers through various offers, highlighting that copra prices, which had increased abnormally, have been corrected by 25 to 30 percent.
Leading baking products and biscuits maker Britannia also acknowledged that margins are good and there are many favorable factors, such as commodity prices.
"Commodity prices have been stable for us. For example, wheat flour, which is very important, actually decreased marginally in Q3 '26. And as we know that February and March are critical seasons for wheat, and based on this, we will see how it behaves in the future, but at the moment, it looks stable," said Britannia Industries MD & CEO Rakshit Hargave.
Leading FMCG maker HUL stated that there is a "steady improvement" in the operating environment for the quarter and in the underlying demand.
"Consumer confidence, as evidenced by the RBI consumer survey, is also seeing a consistent improvement, signifying a recovery in consumer sentiment and willingness to spend," said its CEO & MD Priya Nair in the earnings call.
HUL expects FY'27 to be better than the current fiscal, aided by sustained demand recovery.
"Looking ahead, we expect the operating environment to remain conducive for a sustained recovery in consumption… we expect growth in financial year'27 to be better than financial year'26," said its CFO Niranjan Gupta, who was also on the call.
Godrej Consumer Products Ltd (GCPL) remain confident of achieving high single-digit revenue growth at a consolidated level.
"Our India business is expected to deliver continued growth performance while holding normative EBITDA margins in the coming quarter," said GCPL MD & CEO Sudhir Sitapati in its latest earnings call.
Besides domestic, GCPL expects its GAUM (Godrej Africa, USA and Middle East) to perform well and deliver double-digit revenue and profit growth for the year.
"At a consolidated level, while temporarily macroeconomic and pricing pressure in Indonesia and Latam may have moderated the full year EBITDA growth, we remain confident of a robust exit trajectory and sustain profitability momentum into FY'27," said Sitapati, adding, "we expect this trajectory to sustain through Q4 FY'26".