FMCG Makers Looks Volume-Based Growth in FY’27 with EBITDA Improvements as Inflation Softens

Leading fast‑moving consumer goods (FMCG) companies expect volume‑driven growth to take centre stage in the next fiscal year, supported by easing inflation and stable commodity prices that have begun to ease pressure on margins.

In the December quarter, leading FMCG companies reported mid- to high single-digit volume growth. On their latest earnings calls, the industry captains said the operating environment is turning more favourable after several quarters of volatility.

Key inputs such as edible oils, wheat, copra and surfactants softened, and with macroeconomic tailwinds including GST rationalisation, higher MSPs and a healthy crop season, FMCG makers anticipate sustained demand recovery.

Most players have already taken calibrated price hikes earlier in the fiscal year and now expect growth to be led by volumes rather than pricing.

Some companies indicated they may pass on some benefits of lower input costs to consumers through offers, increased grammage or selective discounts, even as they maintain caution on any residual rollover impact of past price increases.

With inflation cooling and consumer sentiment improving, companies such as Dabur, Marico, Britannia, HUL and GCPL expect EBITDA margins to strengthen in the coming quarters. Industry leaders say FY27 is likely to be better than the current fiscal, driven by stable commodities, easing cost pressures and a broad‑based recovery in consumption.

"As far as inflation is concerned, we saw huge inflation in Quarter 3. Inflation is ebbing a bit, as we see. Coconut oil prices are softening, SLES prices are softening, and vegetable oil prices are also softening. So, the next year growth is going to be more volume-driven growth and not so much price-driven or value-driven growth," said Dabur India CEO Mohit Malhotra in the latest earnings call.

However, Malhotra also warns that price increases will not be absent, as certain price hikes that took place earlier in September will also have a rollover impact.

FMCG companies also witnessed improvement in urban demand sequentially; however, rural continues its consistent performance, growing faster than urban.

Another homegrown FMCG major, Marico, also sees a "gradual recovery in consumption, supported by moderating inflation, improved affordability following the recent GST rate rationalisation, higher MSPs, and a healthy crop sowing season.

"We believe these factors provide a constructive backdrop for demand improvement across both urban and rural markets in the coming quarters," said Marico MD & CEO Saugata Gupta.

The company, which owns popular brand as Saffola, Parachute, and Livon, aims to sustain the volume growth momentum even as pricing growth is likely to moderate over the course of the next few quarters.

“With input cost easing and margin pressure subsiding, we expect progressive improvement in operating profit growth rates over the coming quarters,” Gupta told investors in earnings calls.

Moreover, it may pass on some benefit through some sort of consumer offers, said Marico, highlighting that copra prices, which had abnormally increased, have been corrected by 25 to 30%.

Leading baking products and biscuits maker Britannia also acknowledged that margins are very good and there are a lot of favourable factors at the moment, such as commodity prices.

"Commodity prices have been stable for us. If you take a look at wheat flour, which is very important, it actually came down marginally in Q326. And as we know that February and March are critical seasons for wheat, and based on this we will see how it behaves going ahead in the future, but at the moment, it looks to be stable," said Britannia Industries MD & CEO Rakshit Hargave.

Leading FMCG maker HUL said that there is a "steady improvement" in the operating environment for the quarter and in the underlying demand.

"Consumer confidence, as evidenced by the RBI consumer survey, is also seeing a consistent improvement signifying a recovery in consumer sentiment and willingness to spend," said its CEO & MD Priya Nair in the earnings call.

HUL expects FY27 to be better than the current fiscal, helped by a sustained recovery in demand.

“Looking ahead, we expect the operating environment to remain conducive for a sustained recovery in consumption…we expect growth in financial year'27 to be better than financial year 2026," said its CFO Niranjan Gupta, who was also on the call.

Godrej Consumer Products Ltd (GCPL) remain confident of achieving high single-digit revenue growth at a consolidated level.

"Our India business is expected to deliver continued growth performance while holding normative EBITDA margins in the coming quarter," said GCPL MD & CEO Sudhir Sitapati in its latest earnings call.

Besides domestic, GCPL expects its GAUM (Godrej Africa, USA and Middle East) to perform well and deliver double-digit revenue and profit growth for the year.

"At a consolidated level, while temporarily macroeconomic and pricing pressure in Indonesia and Latam may have moderated the full year EBITDA growth, we remain confident of a robust exit trajectory and sustain profitability momentum into FY27," said Sitapati, adding, "we expect this trajectory to sustain through Q4 FY26"