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Informist, Monday, Apr. 6, 2026

 

By Avishek Rakshit

 

KOLKATA - Despite impending price hikes for consumer goods and the current inflationary macro-environment, which is negatively affecting demand, consumer goods companies in the country are hopeful of posting volume-led revenue growth in the coming months.

 

Hair oils major Marico Ltd., in its business update for the March quarter, said its domestic business registered single-digit underlying volume growth, with a slight sequential improvement, as it saw stable demand conditions during the quarter.

 

While remaining hopeful of a gradual improvement in consumption trends in the quarters ahead, Marico is confident of delivering healthy, volume-led revenue growth in the current financial year. Dabur India Ltd. also shared a similar view, stating that in the coming months, it anticipates a progressive recovery in domestic demand, driven by improving consumption trends.

 

Dabur, one of the leading consumer goods companies focused on rural India, saw steady momentum in its domestic business in the March quarter, underpinned by a stable macroeconomic environment. A strong domestic performance helped Dabur offset challenges in its key international markets in West Asia, where heightened geopolitical tensions led to demand disruptions and supply chain constraints, Dabur said in its quarterly business update.

 

Likewise, AWL Agri Business Ltd., formerly known as Adani Wilmar Ltd., said that its sales volume in the March quarter grew in the double digits, driven by strong growth in edible oils and industrial essentials. In a quarterly business update, AWL Agri attributed its growth to stable consumer demand and a gradual improvement in distribution and maintained that it expects the growth momentum to continue in the coming quarters.

 

Industry officials and sector analysts are of the view that the reduction in the goods and services tax rates during the festive season had a positive impact on demand conditions in Jan-Mar. While companies mostly increased product volume in packs sold to pass on the lower tax benefits to consumers, this led to an increase in total sales volume for the company, which, to a large extent, explains why most companies witnessed a volume boost.

 

"Demand conditions also improved to some extent during the (March) quarter as SKU (stock keeping units) sales increased. It is not the effect of higher volume arising from tax benefits alone which drove the growth in the March quarter," an industry official with a pan-India domestic consumer goods company focused on personal care said.

 

However, industry officials cautioned on forthcoming staggered price hikes to offset higher costs. Some officials maintained that while price hikes may have an immediate negative impact, particularly on value-conscious packs and price points, an improving market sentiment will absorb the hike within a quarter.

 

"There were some price hikes in Jan-Mar, but that didn't dampen the consumer spirit. The consumer today, to a large extent, is aware of the volatility in the market and the macro-economic situation, which enables them to make judicious purchases," the official quoted previously said.

 

In a report, brokerage Nomura said that most raw materials turned inflationary in March, which may put pressure on consumer goods companies.

 

Brent crude oil prices rose sharply by 46% from a month ago in March due to the ongoing war in West Asia, Nomura said. High-density polyethylene prices - a key packaging material used by the entire industry - surged by 42% and palm oil spot prices increased by 8% from a month ago in March, Nomura said.

 

However, prices of some raw materials like copra declined 17% on month in March, while wheat prices fell 5% on month and robusta coffee prices moderated by 29% on year, brokerages said.

 

Industry officials said that although prices of some commodities are falling, this may not be enough to offset the impact of rising costs such as packaging and transport. That will necessitate a staggered price hike in the coming days, they said.

 

WEST ASIAN CRISIS

The volatility in West Asia following the joint attack by the US-Israel on Iran can prove to be a dampener if the war drags on for some time more, industry officials fear. It stems from the fact that oil facilities across the Gulf region are under continuous attack and shipping routes have been blockaded, creating an oil crisis across the globe.

 

Crude oil remains one of the key cost components across sectors, including the consumer goods sector, as it affects logistics costs for everyone and the cost of key raw materials for paint companies. Besides, packaging materials are made from crude oil derivatives, so a shortage of crude oil results in a shortage of packaging materials. Marico, Dabur, and other consumer goods companies are closely watching the developments in West Asia.

 

"In case the situation in West Asia spirals or worsens, we will have to keep a close eye on its effects in India and any resulting inflation which may affect the demand conditions," a second industry official with a consumer goods company focused on food products said.

 

If geopolitical conditions in West Asia and consumer demand in India remain stable or improve, consumer goods companies are headed for a growth trajectory in the coming months that will be both price- and volume-led, industry officials feel. End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Saji George Titus

 

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