FMCG Sees Volume Growth Surge as Inflation Eases

Fast-moving consumer goods (FMCG) companies are projecting a future driven by volume growth, anticipating a more favorable operating environment in the next fiscal year. This positive outlook is supported by easing inflation and stable commodity prices, which have relieved pressure on company margins. Leading FMCG firms observed mid- to high single-digit volume growth in the December quarter, signaling a recovery in consumer sentiment and spending. Macroeconomic tailwinds, including GST rationalization and a healthy crop season, further bolster expectations for sustained demand. Companies like Dabur, Marico, Britannia, HUL, and GCPL foresee strengthened EBITDA margins. While urban demand has improved sequentially, rural consumption remains robust, consistently outpacing urban markets. This trend suggests a broad-based recovery in consumption is underway, positioning FY'27 for better performance than the current fiscal year. Leaders in the industry expect to leverage lower input costs by potentially offering consumers benefits through discounts or increased product grammage, while also managing the residual impact of past price adjustments. The industry is optimistic about progressive improvements in operating profit growth rates, with a focus on maintaining profitability momentum into the next fiscal year.