FMCG Sales May Rise In Q2, But Soaring Input Costs Threaten Profit Margins
New Delhi: India's fast-moving consumer goods (FMCG) companies are expected to report healthy revenue growth in the September quarter of FY27. However, rising raw material costs and expensive packaging could squeeze operating margins despite improving consumer demand.Higher crude oil prices, inflation in key commodities and uneven rainfall have increased cost pressures, forcing companies to balance profitability with sales growth.Double-Digit Revenue Growth ExpectedAccording to brokerage ICICI Direct, several leading FMCG companies could register double-digit revenue growth in Q2 FY27, but operating profit growth may remain slower.The brokerage said higher crude oil and derivative prices would particularly affect home and personal care companies.It also warned that inadequate rainfall could hurt agricultural production and weaken rural consumption, while rising food inflation may affect urban demand.Input cost pressures are expected to continue affecting margins during the second half of FY27.Dabur, Marico See Different TrendsDabur India expects double-digit revenue growth, supported by its core businesses. However, inflation in home and personal care products and healthcare categories has affected operating margins.The company said selective price increases and cost-saving measures helped partly offset higher expenses.Marico, meanwhile, expects stronger gross margins despite rising crude-linked derivative costs. Dabur Expects Double-Digit Revenue Growth In Q2, Cites Strong India FMCG And International PerformanceThe maker of Parachute and Saffola said copra prices remained around 35 per cent below their peak levels, supporting profitability through a favourable product mix.Godrej Flags Rising Commodity CostsGodrej Consumer Products also reported renewed inflation in cr
Published Oct 11, 2026 · 2:45 AMOriginal source: Free Press Journal1 reads
New Delhi: India's fast-moving consumer goods (FMCG) companies are expected to report healthy revenue growth in the September quarter of FY27. However, rising raw material costs and expensive packaging could squeeze operating margins despite improving consumer demand.Higher crude oil prices, inflation in key commodities and uneven rainfall have increased cost pressures, forcing companies to balance profitability with sales growth.Double-Digit Revenue Growth ExpectedAccording to brokerage ICICI Direct, several leading FMCG companies could register double-digit revenue growth in Q2 FY27, but operating profit growth may remain slower.The brokerage said higher crude oil and derivative prices would particularly affect home and personal care companies.It also warned that inadequate rainfall could hurt agricultural production and weaken rural consumption, while rising food inflation may affect urban demand.Input cost pressures are expected to continue affecting margins during the second half of FY27.Dabur, Marico See Different TrendsDabur India expects double-digit revenue growth, supported by its core businesses. However, inflation in home and personal care products and healthcare categories has affected operating margins.The company said selective price increases and cost-saving measures helped partly offset higher expenses.Marico, meanwhile, expects stronger gross margins despite rising crude-linked derivative costs. Dabur Expects Double-Digit Revenue Growth In Q2, Cites Strong India FMCG And International PerformanceThe maker of Parachute and Saffola said copra prices remained around 35 per cent below their peak levels, supporting profitability through a favourable product mix.Godrej Flags Rising Commodity CostsGodrej Consumer Products also reported renewed inflation in crude derivatives, palm oil and other essential raw materials during the quarter.Despite these challenges, the company expects another strong quarterly performance, supported by a favourable year-ago comparison.However, uneven monsoon conditions and inflation could affect consumption trends.Festive Demand Faces Cost ChallengeBrokerage Nomura said several commodity prices remained above year-ago levels in September, despite some sequential moderation. FMCG Growth Accelerates to 15.1% In Q1FY27, Anand Rathi Sees Better Margins & Attractive ValuationsHigher crude oil, packaging materials, palm oil and sugar prices could affect profitability across consumer businesses.Companies are responding through selective price hikes, improved procurement and tighter cost controls.However, passing additional costs to consumers remains challenging as companies seek to protect festive demand and market share.
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