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Informist, Thursday, Apr. 2, 2026

 

MUMBAI – The March quarter earnings of fast-moving consumer goods companies are expected to be similar to the numbers they had reported for the December quarter. Although some lingering benefit from the reduced goods and services tax is likely to be seen in the quarter, higher crude oil prices and the shortage of liquefied petroleum gas are expected to weigh on the earnings.

 

The volume growth of FMCG and consumer staples companies is expected to be similar to that seen in the December quarter. On the value front, the recent rise in raw material costs may result in pushing up prices, Nomura said in a report. Nuvama Institutional Equities expects price hikes of at least 3–4% in the June quarter, if the current inflation in raw material prices persists. Companies in the paints, edible oils, soaps, and detergents sectors could raise prices even more, the brokerage said.

 

Demand in rural areas is likely to hold up with a slight improvement, according to analysts. Nomura expects the demand in the March quarter to be similar to that seen in the December quarter, or even slightly better, as it is the first full quarter to reap the benefit of the GST cut.

 

For the March quarter, the sector is expected to deliver healthy sales growth of 9% on year, comfortably outperforming the eight-quarter average of 7.1%, Nomura said. This growth is largely led by volume than by price, a significant shift from the inflation-heavy quarters of previous years, it said.

 

The earnings before interest, taxes, depreciation, and amortisation are projected to grow by 10.5% on year, fuelled by an inventory of lower-priced raw materials from previous months. Companies such as Nestle India and Asian Paints are expected to lead the pack with double-digit volume growth while Tata Consumer Products and Marico are likely to report the highest revenue growth within the staples segment.

 

Unseasonal rains in some parts of the country in March and lower-than-average surface temperatures are set to dampen the performance of summer-centric categories. Products such as juices, carbonated beverages, cooling oils, ice creams, talcum powder, deodorants, face washes and sunscreens--which typically see a surge in this period--may have a dull quarter, according to Nomura and Nuvama Equities.

 

Paint companies have announced price hikes of around 8% from April, with brokerages seeing 9-10% growth in volumes of these companies for the March quarter. Another FMCG major, ITC, has raised prices by over 30% following the sharp increase in tax on cigarettes and tobacco. "We do not see material impact on volumes (of FMCG companies), if the price hikes are inline with inflation/lower than 10%," Nomura said. "However, in case the price hike is higher than 10%, we expect volumes to also start seeing some moderation."

 

Going ahead, the 62% probability of an El Nino climate phenomenon later this year is likely to have a negative impact on earnings for the financial year 2026-27 (Apr-Mar) as the south-west monsoon rains may be affected, depressing rural demand, Nomura said. "In FY27, summer categories have a low base along with likely El Nino — both a positive; after a likely weak Q4FY26 (Jan-Mar)," Nuvama said.  End

 

Reported by Simran Rede

Edited by Rajeev Pai

 

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