FMCG Companies Expected to Post Mid-to-Double Digit Q3 Growth as Volumes Recover
FMCG companies are projected to achieve mid-single-digit to low-double-digit revenue growth in the December quarter, supported by volume recovery and reduced GST disruptions. Benign commodity trends across crude derivatives, palm oil, and packaging materials are expected to enable gross margin expansion. Major players including ITC, Hindustan Unilever, Nestle India, Tata Consumer Products, Britannia Industries, and Varun Beverages are positioned to benefit from resilient rural demand and portfolio premiumisation strategies.
*this image is generated using AI for illustrative purposes only.
FMCG companies are expected to deliver mid-single-digit to low-double-digit revenue growth for the December quarter, driven by volume recovery, reduced GST-related disruptions, and stable pricing actions. The sector is benefiting from benign commodity trends across key inputs and resilient rural demand, creating favorable conditions for both revenue growth and margin expansion.
Favorable Market Conditions Drive Sector Recovery
Commodity trends remain benign across key inputs such as crude derivatives, palm oil, and packaging materials, providing room for gross margin expansion. Resilient rural demand and portfolio premiumisation continue to be the primary driving forces behind the sector's expected performance.
| Key Growth Drivers: | Impact |
|---|---|
| Volume Recovery: | Mid-single-digit to low-double-digit growth |
| GST Disruptions: | Abating impact on operations |
| Commodity Trends: | Benign across crude derivatives, palm oil |
| Rural Demand: | Resilient performance |
| Pricing Strategy: | Stable across portfolio |
Major Players Positioned for Strong Performance
ITC is expected to post healthy improvement in revenue and profit, led by a resilient cigarette business and steady momentum in other-FMCG and agri business segments. Cigarette volumes are projected to grow around 6.00-7.00%, with pricing remaining stable. The FMCG segment should deliver close to 9.00% revenue growth, supported by stable raw materials, premiumisation, and cost efficiencies.
Hindustan Unilever faced GST-related trade disruptions that affected nearly 40.00% of the product portfolio in the first half of the December quarter, which reduced in the second half. Underlying volume growth is expected at around 2.00-3.00%, with low single-digit price growth. Home and personal care categories may see gradual recovery amid a likely better performance by beauty and wellbeing segments.
Category-Specific Growth Expectations
Nestle India is expected to report double-digit revenue growth, supported by steady domestic volumes and normalisation post-GST implementation. Most categories continue to see double-digit momentum except milk products and nutrition. However, elevated milk and coffee prices may weigh on gross margin, which is estimated to contract year-on-year despite sequential improvement.
| Company Performance Outlook: | Revenue Growth | Key Drivers |
|---|---|---|
| ITC FMCG Segment: | ~9.00% | Stable materials, premiumisation |
| Hindustan Unilever: | 2.00-3.00% volumes | GST disruption recovery |
| Nestle India: | Double-digit | Volume normalisation |
| Tata Consumer: | Broad-based growth | Beverages, foods expansion |
Tata Consumer Products is set for a strong quarter with broad-based growth across beverages, foods, and new-age categories. Domestic tea volumes are expected to grow modestly, aided by price reductions passed from raw tea deflation, while the salt portfolio continues to post solid volume-led growth. Sampann and NourishCo are likely to remain standout performers.
Recovery Momentum Across Traditional Categories
Britannia Industries is poised for recovery after GST-related destocking impacted performance in the previous quarter. With grammage-led growth in lower-unit packs and normalisation in distributor pipelines, biscuit volumes are estimated to rebound in mid-single digits, lifting overall revenue growth. Lower raw material prices should support gross margin expansion.
Varun Beverages is expected to close the calendar year on a positive note, driven by seasonal demand and improving volumes in both domestic and international markets. Consolidated volume is projected to rise in the high-single digit, supported by strong traction in South Africa and steady growth in India. Margin may remain stable and profitability could rise due to lower interest costs.
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