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Informist, Tuesday, Jan. 13, 2026

 

By Avishek Rakshit

 

KOLKATA – A further improvement in rural demand and a gradual recovery in urban consumer sentiment, along with easing disruptions caused by the cut in the Goods and Services Tax, are expected to help fast-moving consumer goods companies report decent earnings growth for the December quarter.

 

The early onset of winter is expected to be a boon for some companies with a strong portfolio for the season and previous price hikes are expected to boost the top line, according to sector analysts. The jewellery segment, which contributes significantly to the top line and bottom line of companies in the consumer segment, continued to grow strongly in the December quarter.

 

The cumulative December quarter net profit of the 17 consumer sector companies in the Nifty 200  is expected to rise over 11% on year but decline marginally on a trailing basis. The quarter-on-quarter bottom line fall is primarily on account of the festive season, which creates pent up demand which was spread across the September and December quarters. Usually, the festive season falls in the December quarter.

 

The cumulative revenue for these 17 sector companies is estimated to increase 14.5% on year and nearly 6% on quarter. In tune with the September quarter, jewellers are expected to drive most of the growth in the consumer sector while major consumer goods companies are likely to see moderate growth in their top line.

 

The 13 pure-play consumer goods companies, which usually drive 64% of the consumer sector's revenue and 85% of the profit, are estimated to report around 9% on-year revenue growth and 7% net profit growth in the December quarter – lower than the sectoral average. Major companies including Hindustan Unilever Ltd. and ITC Ltd. are expected to report mid to low single-digit bottom line growth in the quarter, and most of the consumer goods companies are estimated to report single-digit top line growth in the December quarter.

 

On the other hand, the two jewellery segment companies, which account for 24% of the consumer sector's top line and 13% of the bottom line, are expected to report a 38% on-year revenue growth and 59% net profit growth on account of strong consumer demand due to the wedding season.

 

The three consumer durables companies that account for 12% of the sectoral top line and 2% of the sectoral net profit are expected to report a mixed show in the December quarter. Dixon Technologies (India) Ltd. and Havells India Ltd. are estimated to report profit and top line growth in line with pure-play fast-moving consumer companies, but Voltas Ltd. is expected to continue to strain the consumer durables space by reporting marginal top line growth and declining profits. Anticipating a good summer season, Voltas had loaded its sales channels with substantial inventory which did not get cleared. The summer was extremely weak this year and the early arrival of the monsoon in a La Nina year cooled the mercury in most parts of India which led to poor demand for air conditioners which severely affected Voltas' earnings. Voltas is expected to continue to reel under the inventory overhang in the December quarter as well.

 

GROWING FMCG

 

Demand for fast-moving consumer goods showed steady improvement in the December quarter as the GST-related transient disruptions, such as inventory destocking and shortage of packaging material, were largely normalised post October, brokerage Elara Securities (India) Pvt. Ltd. said in a note. HUL and Dabur India Ltd. would have transitional impact in the December quarter, while a favourable winter in north India will be beneficial for companies such as Emami Ltd. and bakery companies such as Britannia Industries Ltd., Elara said.

 

The price hikes which Britannia had effected prior to increasing the weight of its packages after the GST cut will help boost revenue, the brokerage said. Marico Ltd. had also substantially increased prices of its key portfolio – the Parachute branded hair oil – over the past two quarters, which is expected to help its revenue growth and hence improve the sectoral aggregate growth.

 

The seasonal demand for fast-moving consumer goods is expected to offset the GST cut-led transition disruptions for some key companies, and normalise exit-quarter trends, brokerage Nuvama Wealth Management Ltd. said in a note.

 

However, all brokerages are not so optimistic on the sectoral performance of the pure-play consumer goods companies.

 

Although sectoral growth accelerated in October and November on account of the fast inventory turns for food companies with retailers restocking inventory, the home and personal care categories saw a gradual disruption, along with limited restocking, Emkay Global Financial Services Ltd. said in a note. The restocking of inventory looks unlikely to have been completed in the December quarter, as trade channels view this as an opportunity to improve their return on investment, it said.

 

Some brokerages note winter loading by sales channels was delayed for some major companies with only a limited set of firms seeing benefits in the December quarter. Brokerages also noted the views of companies on expectations of a growth spurt owing to GST cuts varies widely with some seeing benefits flowing from the April quarter and others expecting the benefits to flow not earlier than the September quarter next year.

 

Emkay is of the view that food companies will see growth acceleration in the December quarter while growth in home and personal care will remain muted.

 

THE OUTPERFORMERS

 

The two jewellers in the consumer goods sector – Kalyan Jewellers and Titan Co. Ltd. – are expected to lead December quarter sectoral growth by posting nearly 37% and nearly 40% on-year top line growth, respectively. Their respective estimated on-year net profit growth of 76% and nearly 56% is also the highest among all the 17 consumer companies. Brokerages such as JM Financial Services Ltd. credited the high growth in the jewellery segment to store additions and high gold prices and Kotak Securities Ltd. also factored in recurring jewellery sales as the key growth drivers.

 

Consumer durables companies such as Dixon Technologies and Havells are also expected to report high on-year revenue and net profit growth in the December quarter. Brokerages noted that demand for cables remained healthy in the December quarter owing to strong demand across infrastructure, data centre, and power supplies verticals. This is expected to help Havells report a 10% on-year increase in its top line and a nearly 27% increase in its bottom line for the December quarter.

 

Although Dixon is expected to report a high 21% on-year bottom line growth in the December quarter, brokerage Nomura cautioned that the company's top line may get adversely impacted due to a sharp jump in prices of memory for mobile phones, which impacted supplies especially for the budget cell phone segment. Also, price hikes likely impacted demand for mobile phones. Dixon is a major supplier and assembler for mobile phone companies operating in India. "We believe mobile volumes for Dixon is likely to be subdued in the near term," Nomura said in a note.

 

Among the pure-play consumer goods companies, Tata Consumer Products Ltd., Marico, and Britannia are expected to report good top line and bottom line growth primarily owing to price hikes taken in the past few quarters. Sales volume after the GST rate cut is also expected to help the top line and stabilised raw material prices are expected to boost margins and profit. Volume growth is expected to be the key revenue and profit driver for Tata Consumer and Marico, while premiumisation of portfolio is expected to drive Britannia's revenue and net profit growth, Nuvama noted.

 

THE LAGGARDS

 

Although a strong winter is helpful for companies with a substantial personal care portfolio such as HUL, Dabur, Emami, the dip in mercury may not be helpful for companies such as United Spirits Ltd. which usually sees its beer volume go down during the winters, Nuvama noted. Added to the seasonal weakness, United Spirits is also expected to face headwinds in Maharashtra which will likely negatively impact sales volume of its premium products under the state's new liquor policy which aims to promote local breweries. United Spirits is expected to report a nearly 6% on-year increase in its top line, mainly from increased sales in Andhra Pradesh, but its bottom line may decline by 5% on year, brokerages anticipate.

 

Voltas is expected to continue to reel under the pressure of overloaded inventory, both at the company and at its sales channels, which may see the company or retailers offering steep discounts on air conditioners to clear the inventory before the next summer season starts. The Tata group company is expected to report only 1% increase in sales, but the net profit is projected to decline by a steep 36% on year, according to the average of estimates from 10 brokerages.

 

Colgate-Palmolive India Ltd. is also expected to post a marginal on-year decline in its net profit during the December quarter and revenue is expected to increase by a meagre 1% as sales volume is projected to decline by 3%, according to brokerages. Colgate has been reeling under heightened competition and losing market share, especially to the British multinational group, Haleon, which sells the Sensodyne brand of toothpaste.

 

This earnings season, investors and sector analysts alike will keep a close watch on the companies' commentary on the pace of revival in urban demand, restocking in the sales channels, and projections on raw material prices such as palm oil – the key input cost for most of the pure-play consumer goods companies.

 

Brokerages noted that tea procurement costs were down 8% on year in the December quarter and are likely to remain benign, which will benefit companies such as HUL and Tata Consumer. Copra prices – the single-most important raw material for hair oil segment – also corrected by 25% from its peak in the December quarter and palm oil prices are currently down 19% on year.

 

Brokerages project Malaysia's crude palm oil production is likely to surpass 20 million tonnes for the first time, rising by over 3% on year and high yields are likely to keep prices stable.

 

Following are the average of estimates from 12 brokerages for the Oct-Dec earnings of 17 consumer sector companies that are a part of the Nifty 200 index in INR million:

 

 

Company name	Sales, INR million	PAT, INR million	Sales Y-o-Y Change %	PAT Y-o-Y Change %	Sales Q-o-Q Change %	PAT Q-o-Q Change %
Britannia Industries +	49,916	6,706	8.69	15.29	3.12	2.47
Colgate Palmolive	14,794	3,213	1.20	(0.45)	(2.64)	(1.89)
Dabur India +	35,563	5,589	5.99	6.98	11.44	23.49
Dixon Technologies (India) +	113,576	2,064	8.65	20.58	(23.54)	(69.19)
Godrej Consumer +	41,179	5,870	9.27	16.45	7.65	20.03
Havells India	53,742	3,584	10.07	26.73	12.75	12.89
Hindustan Unilever	161,561	25,556	4.86	2.55	3.66	1.98
ITC	185,010	51,503	8.49	5.25	2.66	1.15
Kalyan Jewellers India+	99,474	3,852	36.68	76.01	26.62	47.84
Marico +	35,458	4,451	26.91	11.55	1.83	5.97
Nestle India	52,770	7,356	10.40	5.67	(6.50)	(2.34)
Patanjali Foods	99,355	3,435	8.94	(7.40)	1.39	(33.52)
Tata Consumer Products +	50,147	4,093	12.85	43.58	0.98	1.19
Titan Co	224,967	15,429	39.76	55.84	36.06	53.37
United Spirits	36,307	5,101	5.79	(5.19)	14.53	1.61
Varun Beverages +	39,869	2,680	8.08	44.74	(18.58)	(63.85)
Voltas +	31,382	849	1.07	(35.72)	33.69	147.68
Total	1,325,071	151,330	14.51	11.39	5.75	(0.09)

 

Notes:

+ Consolidated Figure

Y-o-Y: Year-on-Year

Q-o-Q: Quarter-on-Quarter

N.A.: Not Available

 

Estimates from:

Anand Rathi Share and Stock Brokers Ltd, Antique Stock Broking Ltd, Centrum Broking Ltd, Dolat Capital Market Pvt Ltd, Elara Securities (India) Pvt Ltd, Emkay Global Financial Services Ltd, HDFC Securities Ltd, HSBC Global Research, ICICI Securities Ltd, IIFL Capital Services Ltd, JM Financial Institutional Securities Pvt Ltd, Kotak Institutional Equities, Motilal Oswal Financial Services Ltd, Nirmal Bang Equities Pvt Ltd, Nomura Equity Research, Nuvama Wealth Management Ltd, Prabhudas Lilladher Pvt Ltd, Sharekhan Ltd, Systematix Shares and Stocks (India) Ltd and YES Securities (India) Ltd.

 

End

 

Edited by Deepshikha Bhardwaj

 

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