More Stories

Informist, Tuesday, Aug. 25, 2026

 

By Avishek Rakshit

 

KOLKATA – Despite severe cost headwinds arising from the West Asia war, a rebound in consumer demand led the fast moving consumer goods sector and allied sectors such as retail and consumer durables to report a net profit and revenue growth in the June quarter. The government's move to modify the goods and services tax structure on consumer goods and cigarettes had a mixed impact on the sector. 

 

The 21 fast moving consumer goods companies and those from the retail, consumer durables, and jewellery sectors that are part of the Nifty 200 index, posted a 6.82% on-year increase in their net profit in the June quarter, in line with with the Street's expectation of a 6.78% on-year growth. The profit growth was despite the 15.56% on-year average revenue growth of these companies falling short of the Street's expectations of 16.38% top-line growth.

 

However, the fast moving consumer goods companies considerably lagged the top-line and the bottom-line growth of the overall Nifty 200 index companies. The average top line of the companies which are part of the Nifty 200 index rose 21.9% on year and the adjusted bottom line rose 11.7% on year. Comparatively, the FMCG companies reported 15.6% on-year revenue growth and 6.82?justed net profit growth. 

 

Over the past four quarters, the FMCG companies have been posting a steady on-year increase in their revenue growth. for instance, in the September quarter of the last financial year, these companies registered only 9.43% on-year top-line growth which increased to 14% on-year top-line growth in the December quarter. In the March quarter, their revenue growth came in at 13.3%.

 

The adjusted net profit growth for these companies in the June quarter, at 6.82%, however, was the lowest in the past four quarters. Not helping the bottom-line performance was the fact that companies had stepped up their expenses on advertising and promotions in the June quarter in face of heightened competition in the industry as companies became aggressive for a larger market share and expand their portfolios. The average spend of these companies on advertising and marketing increased 16.2% on year in the June quarter--the highest on-year increase in nine quarters. 

 

The moderate adjusted net profit growth for the sector was primarily on account of ITC Ltd. registering a sharp 271% on-year decline in its net profit in the June quarter as its top line tanked by 14.4% on year, primarily due to lower cigarette sales and its agricultural business continuing to feel the blues of the West Asia war. Godfrey Phillips India Ltd., the second-largest cigarette player in the country, also saw its bottom line falling by 51.4% on year and top line declining 18.9% on year in the June quarter due to lower cigarette sales. Even though Hindustan Unilever Ltd.  posted a 9.8% on year increase in its revenues, the company's adjusted net profit declined by 1% in the June quarter due to high input costs. 

 

Out of these 21 sector companies, 15 met or surpassed the consensus estimates of analysts for their respective net profit growth for the June quarter and 11 reported a revenue growth either in line with the Street or beyond expectations. Estimates for one company Godfrey Phillips were not available. 

 

Nestle India Ltd., Britannia Industries Ltd., Godrej Consumer Products Ltd., United Spirits Ltd., Colgate-Palmolive (India) Ltd., Dabur India Ltd., Dixon Technologies (India) Ltd., Havells India Ltd., Kalyan Jewellers Undia Ltd., Marico Ltd., LG Electronics India Ltd., and Patanjali Foods Ltd. met or surpassed the Street's revenue estimates on their respective revenue consensus while industry leader HUL, ITC, Tata Consumer, Titan Co. Ltd., Varun Beverages Ltd., Blue Star Ltd., Radico Khaitan Ltd., and Voltas Ltd. failed to meet the Street's expectations on each of these companies. 

 

HUL, Nestle India, Tata Consumer, Titan, Britannia, Godrej Consumer, United Spirits, Colgate-Palmolive, Dabur, Dixon, Marico, Radico Khaitan, LG Electronics, Voltas, and Patanjali met or surpassed their net profit consensus estimates and the rest five companies failed to meet their respective profit projections. 

 

As many as 16 companies from the FMCG and allied sector universe reported adjusted net profit growth higher than the average 6.8?justed net profit growth for the sector, and 10 companies reported revenue growth exceeding the sectoral average of 15.6%. Although only five companies reported their revenue growth exceeding the average 21.1% growth registered by the companies in the Nifty 200 index, 14 companies exceeded the average 11.7% average adjusted net profit growth registered by the NIFTY 200 companies.

 

THE OUTPERFORMERS 

In the pure-play FMCG universe, Nestle India emerged as the top performer with all of its four product groups delivering strong double-digit growth, supported by high double-digit growth across sales channels. While Nestle India remains cautious on volatility in commodity and shipping costs due to US-Israel's war on Iran that disrupted global shipping routes, the company is steadily increasing its sales channels, focussing on increasing indigenisation, and taking cost-reducing measures. 

 

Price increases, portfolio enhancement, and improving sales mix led other companies such as Britannia, Godrej Consumer, United Spirits, Colgate-Palmolive, Dabur, Dixon, Marico, LG Electronics, and Patanjali post strong revenue and profit growth in the June quarter. 

 

A strong summer season and correct inventory management with its sales channels led LG Electronics reap benefits of higher air-conditioner sales, but its peers such as Blue Star and Voltas, which were laden with inventory in sales channels could not fully benefit from the surge in sales. 

 

THE LAGGARDS

Falling cigarette sales took a heavy toll on ITC's profits and revenue in the June quarter, thereby, severely impacting the overall top-line and bottom-line performance of the FMCG sector in the June quarter. ITC's net profit declined over 27% on year and revenues fell over 14% on year in the June quarter which stressed not only India's top cigarettes maker, but also put stress on the sectoral performance in the June quarter. 

 

While sector analysts projected ITC's cigarette sales to have fallen 5-6% sequentially in the June quarter, retailers had pegged the decline higher at 14-20% on month. To make matters even worse for the sector, ITC and Godfrey Phillips both continue to register declining cigarette sales till day, according to retailers selling cigarettes. 

 

ITC, being the largest consumer goods company by sheer top line, singly took a heavy toll on the sectoral performance, upsetting the gains made by companies such as Nestle India, Godrej Consumer, Marico, and several others. 

 

Varun Beverages' bottom line also failed to meet the Street's expectation even though the company posted strong sales volume growth. the company's focus on expanding its African operations and make significant investements to up production capacity led the company miss the Street's bottom line estimates. While Blue Star felt the heat arising from clearing high inventory with its sales channels that impacted its profits, Kalyan Jewellers and Havells also lagged in profit growth. 

 

SECTORAL OVERVIEW

The government's move to reduce goods and services tax on several consumer goods items boosted demand for those consumer products, aiding top line growth for several companies such as HUL, Nestle India, Tata Consumer Products Ltd., and many others. However, its decision to raise taxes on cigarettes considerably led companies such ITC and Godfrey Phillips feel both revenue and profitability pressures. 

 

In the consumer goods universe in the country, although HUL features as the largest pure-play fast moving consumer goods company, ITC's top line is the largest among its peers despite the company being heavily dependent on cigarettes sales. 

 

ITC alone accounts for 10.9% of the total topline of the 21 companies from the consumer goods, retail, jewellery, and consumer durables sector, which are part of the Nifty 200 index, followed closely by HUL's 10.7%. Thus, the sectoral top-line growth is heavily dependent on these two companies. Being in the jewellery business, Titan Co. Ltd. and Kalyan Jewellers Ltd. also greatly influence the top line of entire sector as these companies factor in the price of gold and gems and precious metals in their revenue. 

 

Registering a 3-6% on-year volume growth for the past several quarters, ITC saw its cigarette sales volume declining again after the March quarter, in the April quarter by 5-6% on quarter but the price hikes effected by the company to pass on increased taxes to consumers improved its revenues from cigarette sales.

 

All consumer goods companies raised prices in the June quarter and some did in a row after raising prices in the March quarter as well to maintain margins and profitability in times of increase in raw material prices. Ideally, such back-to-back and continued price hikes would dampen consumer demand and negatively impact sales, but this wasn't the case in the June quarter. 

 

Senior industry officials across nearly all companies said that consumers absorbed the price hikes, realising that the West Asia war had inflated costs and companies had no other alternatives but to pass it on to consumers. Besides, some companies also indicated future price hikes if war in West Asia does not end or reach a solution. 

 

While most of the top-line growth for the fast moving consumer goods companies came in from price hikes, sales volumes also improved signalling a rebound in consumer demand. 

 

At the same time, volatility in gold prices which are at elevated levels for some quarters now also prompted jewellers like Titan and Kalyan Jewellers to come up with more affordable products by essentially coming up with lower carat jewellery and maximising studded jewellery sales. 

 

WEST ASIA WAR

The war in Iran and subsequent blockade of the Strait of Hormuz disrupted crude oil and gas supplies globally. On one hand, disruption in crude oil supplies led petrochemicals and crude oil derivate prices to surge owing to fear of scarcity and the blockage led to elevated shipping costs. On the other hand, Malaysia's move towards biodiesel led palm oil prices to surge. Palm oil is a key component for the Indian consumer goods industry. Not only packaged food products are cooked in palm oil, it is also used to make soaps. Crude oil derivates are used in personal care products. 

 

Raw material costs for the consumer goods and retail sector increased 15.9% on year in the June quarter primarily owing to these disruptions. However, even before the disruptions caused by the Iran war, palm oil prices remained elevated and for these companies prompting them to increase prices and launch new pack sizes to maintain consumer demand momentum. The raw material costs increase for the June quarter was the second lowest in nine quarters, with only the December quarter of last financial year recording a lower increase of 2.6% on year.

 

While companies faced cost pressures in the June quarter, part of their revenue also were hit on account of the West Asia crisis. Iran's attacks on the UAE and other Gulf region countries led to plant closures of Indian consumer goods companies and disrupted their supply of finished products to markets. At the same time, increased shipping costs owing to container shortage and elevated insurance costs led companies to curtail exports to the Gulf region countries. The West Asian region is a key market for companies such as Dabur, Britannia, Marico, Tata Consumer, and several others. 

 

The following table shows the performance of the 21 companies in the fast moving consumer goods, retail, jewellery, and consumer durable products' sector vis--vis the consensus estimate for each company as well as against the consensus estimate for the FMCG sector and the Nifty 200 index.

 

 

Company	PAT beat analysts' estimate	Adjusted PAT growth %	Adjusted PAT growth estimate %	Revenue beat analysts' estimate	Revenue growth %	Revenue growth estimate %
FMCG, Retail, Jewellery, and Consumer Durables Sector	NO	6.82	6.78	NO	15.56	16.38
Nifty 200	--	11.73	-6.02	--	21.91	18.76
HINDUSTAN UNILEVER LIMITED	YES	-0.95	-3.81	NO	9.77	11.14
ITC LIMITED	NO	-27.12	-9.11	NO	-14.44	-6.00
NESTLE INDIA LIMITED	YES	48.86	23.97	YES	25.16	18.35
TATA CONSUMER PRODUCTS LIMITED	YES	27.78	22.65	NO	11.93	12.75
TITAN COMPANY LIMITED	YES	64.95	25.38	NO	24.29	41.77
BRITANNIA INDUSTRIES LTD	YES	13.56	13.10	YES	8.17	7.74
GODREJ CONSUMER PRODUCTS LIMITED	YES	14.95	12.01	YES	18.32	17.93
UNITED SPIRITS LIMITED	YES	82.95	26.74	YES	6.04	5.55
VARUN BEVERAGES LIMITED	NO	15.47	18.81	NO	20.43	22.71
BLUE STAR LIMITED	NO	-22.84	25.26	NO	13.27	18.64
COLGATE-PALMOLIVE (INDIA) LIMITED	YES	8.05	5.55	YES	11.80	9.11
DABUR INDIA LIMITED	YES	14.98	11.78	NO	10.57	11.11
DIXON TECHNOLOGIES (INDIA) LIMITED	YES	194.89	5.49	YES	21.13	13.62
GODFREY PHILLIPS INDIA LIMITED	N/A	-51.40	N/A	N/A	-18.87	N/A
HAVELLS INDIA LIMITED	NO	-15.30	15.70	YES	19.72	19.55
KALYAN JEWELLERS INDIA LIMITED	NO	32.03	47.66	YES	45.68	41.35
MARICO LIMITED	YES	25.00	15.57	YES	22.85	22.25
RADICO KHAITAN LIMITED	YES	69.50	39.88	NO	11.80	12.66
LG ELECTRONICS INDIA LIMITED	YES	27.20	20.22	YES	15.49	14.25
VOLTAS LIMITED	YES	52.19	44.36	NO	18.66	28.43
PATANJALI FOODS LIMITED	YES	86.18	39.36	YES	29.33	14.92

 

The following table shows the profit margins of the 21 FMCG companies that are a part of the Nifty 200

 

Company	Adjusted PAT Margin for Jun-26	Adjusted PAT Margin for Jun-25	Adjusted PAT Margin for Mar-26
FMCG Sector	11.00%	11.78%	11.81%
Nifty 200	13.31%	16.08%	13.83%
HINDUSTAN UNILEVER LIMITED	16.25%	18.65%	17.25%
ITC LIMITED	21.17%	24.85%	31.85%
NESTLE INDIA LIMITED	15.39%	12.94%	17.05%
TATA CONSUMER PRODUCTS LIMITED	7.98%	6.99%	7.66%
TITAN COMPANY LIMITED	9.39%	7.07%	4.49%
BRITANNIA INDUSTRIES LTD	11.83%	11.27%	14.37%
GODREJ CONSUMER PRODUCTS LIMITED	12.31%	13.22%	13.97%
UNITED SPIRITS LIMITED	17.46%	10.55%	20.06%
VARUN BEVERAGES LIMITED	17.99%	18.77%	13.27%
BLUE STAR LIMITED	2.76%	4.06%	5.15%
COLGATE-PALMOLIVE (INDIA) LIMITED	21.61%	22.36%	23.19%
DABUR INDIA LIMITED	15.70%	15.09%	12.13%
DIXON TECHNOLOGIES (INDIA) LIMITED	4.27%	1.75%	2.44%
GODFREY PHILLIPS INDIA LIMITED	14.77%	24.66%	26.98%
HAVELLS INDIA LIMITED	4.58%	6.48%	10.98%
KALYAN JEWELLERS INDIA LIMITED	3.29%	3.63%	3.99%
MARICO LIMITED	15.92%	15.65%	11.84%
RADICO KHAITAN LIMITED	13.42%	9.32%	11.65%
LG ELECTRONICS INDIA LIMITED	9.03%	8.20%	8.60%
VOLTAS LIMITED	4.57%	3.57%	2.38%
PATANJALI FOODS LIMITED	2.96%	2.06%	6.21%

 

End

 

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

 

Edited by Akul Nishant Akhoury

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

 

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2026. All rights reserved.