FMCG firms optimistic on demand, expect easing input costs to aid 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 Nino-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.

"With revenue growth tracking ahead of our original expectations and input costs beginning to ease, we enter the remainder of FY27 with increased confidence. We remain firmly on track to deliver our guidance for the full year with the strong likelihood to exceed the same in select metrics," it noted.

According to Dabur, it continues to focus on its strategic priorities aimed at capturing, improving consumption trends, enhancing cost competitiveness, leveraging digital capabilities and delivering sustainable and profitable growth over the medium to long term.

Dabur said overall, the underlying fundamentals of the business remain strong.

It expects consumption in its international markets, which contributes nearly one-fourth of its consolidated revenue, to improve in the coming quarters as the situation in West Asia stabilises.

Besides, "domestic demand trends remain encouraging, with both rural and urban markets sustaining growth momentum, while rural markets continue to outperform urban centres," said the company, which operates with brands like Dabur Chyawanprash, Dabur Honey, Dabur Honitus, Dabur PudinHara and Real.

Dabur said it remains focused on its key growth priorities and is well positioned to benefit from improving demand, drive cost competitiveness, harness digital capabilities and deliver sustainable, profitable growth over the medium to long term.

Marico said demand trends during the quarter remained steady, aided by resilient economic activity.

"Looking ahead, we remain optimistic about consumption trends, while closely monitoring the evolving inflationary conditions and the impact of El Nino on the monsoon," it noted.

The company, which owns Parachute, Nihar, Hair & Care, Saffola and Livon brands, maintains 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 scale-up of new growth engines across markets.