India’s FMCG sector is feeling the squeeze as raw‑material and oil prices surged in Q2, eroding margins even as revenue and volume grew.
Godrej Consumer Products flagged rising input costs in the quarter and cited uneven monsoon conditions, but said it was countering the pressure with calibrated pricing, cost‑saving measures and supply‑chain efficiencies. The company projected high‑teens revenue growth and single‑digit underlying volume growth.
Dabur, which expects consolidated revenues to rise by double digits, warned that operating margins were hit by inflation, partially offset by price increases. Despite low double‑digit sales growth, earnings growth remains modest, according to the company’s Q2 update.
HDFC Securities noted sustained cost headwinds could moderate growth and strain FY27 earnings, while JM Financial warned that raw‑material pressures would likely keep margins flat. Independent consultant Akshay D’Souza added that volume growth will become evident in the March quarter, and that further price hikes could erode GST‑cut benefits.
Marico said domestic demand stayed resilient, but it will keep a close eye on inflation. Industry experts anticipate that firms may raise prices further in the coming months, potentially eroding GST‑cut benefits and compressing profitability.