Results preview: Rising rural demand may reflect in FMCG firms' Q1 showing

Dabur, Marico and Godrej Consumer see improved trends; AWL flags muted demand

Fast-moving consumer goods (FMCG) companies are seeing a sequential uptick in volumes and a continued recovery in rural demand, which they have told investors in their quarterly updates before their results.

 

However, AWL Agri Business (formerly known as Adani Wilmar) has pointed out in its update that other than its strategic consolidation of rice operations, it has witnessed muted consumer demand in the quarter.

 

In its update Dabur India said: “During the quarter, the Indian FMCG sector witnessed a sequential recovery in demand with uptick in volume growth particularly in urban markets.”

 

Godrej Consumer Products also said that its standalone growth in volumes had been strongly competitive and was sequentially improving, adding that its consolidated revenue growth was expected to be in double digits on the back of high single-digit underlying volume growth. 

 

Marico told investors its underlying volume growth in the India business continued to improve sequentially to reach a multi-quarter high, driven by positive trends in the core franchises and a continuous scaleup of new businesses.

 

While talking about overall demand in the sector, Marico said: “The sector exhibited consistent demand patterns, marked by improving trends in rural markets and steady urban sentiment. We expect gradual improvement in the quarters ahead, supported by easing inflation, a favourable monsoon season and policy stimulus.”

 

The maker of Parachute coconut oil said its consolidated revenue growth year-on-year stood in the low twenties, marking a strong start towards delivering double-digit growth on a full-year basis, underpinned by the strengthening trajectory in volumes.

 

Godrej Consumer Products also said in its update it expected performance to improve sequentially in FY26.

 

“We believe for FY26, we are on track to deliver mid-high-single digit underlying volume growth for standalone business, high-single digit consolidated Indian rupee revenue growth and double-digit consolidated Ebitda (earnings before interest, depreciation, taxes and amortisation) growth for the full year,” it said.

 

It added that its standalone Ebitda margin in the April-June quarter was likely to be below its normative range but was expected to improve. 

 

Dabur India also informed its investors prior to its results that on account of decline in beverages, its consolidated revenue was expected to grow in low-single digits and its consolidated operating profit growth was expected to marginally lag revenue growth.

 

The April-June quarter, which typically sees high demand for summer products, was impacted this year because the season was impacted due to the early arrival of monsoons.

 

In its outlook, the Delhi-based consumer major said with its refreshed strategic vision, favourable macroeconomic conditions such as an above normal monsoon, good agricultural output, easing inflation and consumption-focused government measures, the company expected revenue growth to regain momentum and trend higher in coming quarters.

 

“The fundamentals of the business remain strong, and we are continuing to invest behind our brands, expand our distribution reach, build a strong back end and capture efficiencies to deliver good growth in revenue and profitability for the year,” the maker of Real juices said.

 

Marico also said in its update it maintained its aspiration of delivering sustainable and profitable volume-led growth over the medium term, enabled by the strengthening brand equity of its core franchises and scaling up of new engines of growth.

 

AWL Agri Business, however, has witnessed a 4 per cent decline in its volumes during the quarter due in a major way to the rice category being the key drag.

 

“Encouragingly, the core categories delivered healthy volume growth, and revenue rose 21 per cent year-on-year, driven by higher edible oil realisations,” it said.

 

On the cost of raw materials, Godrej Consumer Products said palm oil prices had started to moderate towards the end of June, but the benefits of this moderation would be realised only in the second half of FY26.

 

Marico also said it expected pressure on gross margins to ease in the second half of the financial year.