Fast-moving consumer goods (FMCG) companies are expected to report double-digit sales growth for the April-June quarter, while volume trends are expected to remain resilient but uneven across companies, according to brokerage firms JM Financial and IIFL Capital.
Brokerage firm JM Financial said its channel checks and pre-quarter updates point to an improving revenue growth trajectory, led by resilient demand and price hikes. The brokerage expects sales for its staples coverage, excluding ITC and Varun Beverages (VBL), to grow around 13% year-on-year (YoY), compared with high-single-digit growth in the second half of FY26.
Within the food and beverages (F&B) segment, Nestlé and VBL are expected to report mid-teens sales growth, while Tata Consumer and Bikaji may see some moderation compared to recent quarters. In the home and personal care (HPC) segment, Marico and Honasa are expected to outperform, followed by Godrej Consumer Products (GCPL) with high-teens growth. Dabur, Hindustan Unilever (HUL) and Colgate are expected to report high-single-digit to low-double-digit sales growth.
1 June 2026
Get the latest issue of Outlook Business
JM Financial said inflation in crude-linked input costs is likely to be partly offset by the use of low-cost inventory, price hikes, controlled advertising spends and cost-saving measures. As a result, EBITDA growth is expected to be slightly better than sales growth for its staples coverage. The brokerage expects a healthy quarter for Marico, Nestlé, GCPL, HUL, Honasa and VBL, while Tata Consumer, Jyothy Labs and ITC may report relatively weak performance.
On volumes, Honasa is expected to sustain around 20% growth, followed by double-digit growth for Marico and Jyothy Labs. GCPL, HUL, Dabur, Bikaji and Colgate are likely to report mid-to-high-single-digit volume growth. In the F&B segment, VBL is expected to lead with around 20% volume growth, aided by a strong summer and a soft base, followed by Nestlé with mid-teens growth. Tata Consumer's tea business and Britannia are expected to report 5-7% volume growth.
Asian Paints is expected to report 10% decorative volume growth, supported by stable demand and some channel stocking ahead of price hikes. ITC's cigarette volumes are expected to decline by around 10% due to a steep hike in excise duty.
JM Financial noted that its proprietary FMCG raw material index rose about 31% year-on-year and 19% quarter-on-quarter. It expects quarter-on-quarter gross margin pressure across companies, except Marico, which could benefit from softening copra prices. The brokerage said its staples coverage, excluding ITC, is trading at a near-term price-to-earnings ratio of 50 times, compared with about 46 times at the end of the fourth quarter of FY26.
Notably, IIFL Capital expects aggregate sales growth of 6.8% for the sector, with sales growth excluding ITC accelerating to 14%, from 10.4% and 12.5% in the third and fourth quarters of FY26, respectively. The brokerage said the acceleration is largely driven by pricing amid commodity inflation, rather than a material change in underlying demand.
Strong summer conditions and a low base are expected to support the summer-intensive portfolios of VBL, Emami and Dabur, while affecting Tata Consumer's tea business. International business for Dabur and Emami is expected to remain under pressure due to the Middle East crisis, which accounts for about 7-8% of their business. ITC's transition to the new cigarette tax regime is expected to weigh on its performance, with cigarette net sales likely to decline by around 28%.
IIFL Capital expects VBL, Bajaj Consumer, Honasa, Nestlé, DOMS and Marico to report strong revenue growth, while ITC and Jyothy Labs are likely to report weak performance. The brokerage expects aggregate gross margin, excluding ITC, to contract by 29 basis points YoY, while EBITDA, excluding ITC, is expected to grow 15.3%, implying a 23 basis point margin expansion.
