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Informist, Wednesday, Dec. 31, 2025

 

KOLKATA – The fast-moving consumer goods sector in the country is expected to report 6% volume growth in the December quarter, up from 4% a year ago, brokerage Nuvama Wealth Management Ltd. said on Wednesday. Revenue growth in the December quarter is expected to be 7%, the same as a year ago, the brokerage said. 

 

The early onset of winter and the continuing cold-wave conditions across the country boosted demand for winter products. The recovery in consumer demand will be sufficient to offset trade disruptions in consumer goods channels caused by the goods and services tax cuts, Nuvama said in a report. 

 

During the transitional period following the GST rate cut, companies' sales volumes were affected by delayed consumer purchases and reluctance among sales channel partners to stock higher-priced inventory. Nuvama, however, said that sales had recovered enough in Nov-Dec and have offset the losses arising from the transition. 

 

Emami Ltd., which has a strong seasonal portfolio, stands to gain the most from the harsh winter, Nuvama said, adding it expects double-digit sales growth for the company during the second half of 2025-26 (Apr-Mar), supported by a sharp pickup in seasonal categories.

 

Industry leaders Hindustan Unilever Ltd. and Dabur, which have a strong winter portfolio, reported some disruption in October due to the GST transition. However, improved offtake in Nov–Dec should slightly mitigate the impact, Nuvama said. Winter-sensitive portfolios are seeing traction led by skin care, personal care, balms, and health supplements, which aided volume recovery, it said. 

 

However, while most consumer goods companies with strong winter portfolios stand to gain, companies like United Spirits Ltd. and United Breweries Ltd. stand to lose, the brokerage said. United Breweries may report flat sales volumes in the December quarter. But a strong focus on premium and premium-priced products may enable United Spirits to register 2% volume growth in the December quarter, Nuvama said. 

 

Quoting the key takeaways from the FMCG Summit hosted by the Confederation of Indian Industries in Mumbai in December, Nuvama said that urban consumer sentiment has strengthened sharply, supported by better income perceptions, with the share of urban households feeling financially better off rising by 1.2% on year. In contrast, consumer sentiment in rural India cooled in November.

 

Nuvama said that 60% of Indian consumers expect to increase household spending over the next six months, up from 50% in September 2024. The spending intent is also stronger for long-cycle and essential categories such as automobiles, mobiles and housing rentals. At the same time, it remains lower for categories with frequent consumption, such as packaged snacks and soft beverages, the brokerage said. 

 

Commenting on palm oil prices and production trends, which is one of the key raw materials for the FMCG industry, Nuvama said that crude palm oil production in Malaysia is expected to surpass 20 million tonnes for the first time in the 2025 calendar year, supported by favourable weather, improved labour supply and higher-yielding new plantations.

 

"This year's (Malaysian crude palm oil) output is estimated to be 3.4% higher than last year's 19.34 million tonnes and to surpass the previous record of 19.96 million tonnes set in 2015," Nuvama said in the report. 

 

Such production trends are likely to keep input costs for Indian FMCG companies under check and it is a positive trend especially for foods companies like Nestle India Ltd., Britannia Industries Ltd., and Bikaji Foods Ltd. Soap companies including Hindustan Unilever and Godrej Consumer Products Ltd. also stand to gain as palm oil derivatives are used to make soap. 

 

As a result, Nuvama expects the consumer goods industry to report earnings before interest, tax, depreciation, and amortisation growth of 7% in the December quarter, as against 4% a year ago. End

 

Reported by Avishek Rakshit

Edited by Saji George Titus

 

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