FMCG companies indicate mid single-digit revenue growth in second quarter

FMCG majors expect moderate Q2 growth as GST rate cuts and inventory liquidation affect sales; Marico bucks trend with strong pricing-led performance

Fast-moving consumer goods (FMCG) companies are expected to report mid-single-digit revenue growth in the July–September 2025–26 quarter, according to their quarterly updates. Most companies also noted that supply chains were focused on liquidating existing stock ahead of the implementation of new goods and services tax (GST) rates in categories where the tax was lowered.

 

An outlier is Marico, which said its consolidated revenue growth on a year-on-year (Y-o-Y) basis could touch the thirties, driven by pricing interventions and mix improvements. However, the company told investors that underlying volume growth in its India business remained in the high single digits and is expected to moderate sequentially.

 

Dabur India and Godrej Consumer Products (GCPL) said consolidated revenue is expected to grow in the mid-single digits.

 

The maker of Vatika hair oil added that operating profit will rise roughly in line with revenue, while GCPL noted that the GST transition in India is likely to have a short-term impact on profitability, with earnings before interest, tax, depreciation, and amortisation expected to decline for the quarter.

 

“The government’s recent GST reform represents a landmark step towards driving affordability and enhancing purchasing power, which will boost consumption across categories and strengthen demand in both urban and rural markets,” Dabur India said in its update.

 

GCPL also described the reforms as an encouraging step to strengthen consumer demand. “With the revised rates, nearly one-third of GCPL’s portfolio — primarily toilet soaps, as well as smaller categories like talcum powder, shampoo, and shaving cream — now benefits from a reduced GST of 5 per cent, down from 18 per cent.”

 

It added, “The GST rate reductions have resulted in some short-term adjustments across trade channels, as distributors and retailers focused on liquidating existing inventories. This has delayed the flow of new orders and temporarily deferred consumer purchases, impacting both growth and profitability.”

 

Hindustan Unilever said the quarter could face a transitory impact from GST and expects its consolidated business growth to be near flat to low-single-digit. “This is a one-off, transitory impact, and we anticipate recovery starting in November as prices stabilise, underpinned by rising disposable incomes and our ongoing portfolio transformation actions,” it said.

 

AWL Agri Business (formerly Adani Wilmar) reported 5 per cent Y-o-Y volume growth and 24 per cent Y-o-Y revenue growth, driven mainly by edible oils and the essential industry segment.