Patchy summer, shifting demand: Dabur, Marico, Godrej likely saw diverging fortunes in Q1 sales
This divergence is largely attributed to untimely rains and a milder summer, hurting demand for seasonal categories.
On Friday, homegrown consumer goods company Dabur India said that the Indian FMCG sector saw a sequential recovery in demand in the June quarter, with an uptick in volume growth particularly in urban markets.
Dabur's home and personal care (HPC) division is expected to perform well, driven by its oral, home and skin care categories. The beverage portfolio was impacted due to unseasonal rains and a brief summer. On account of decline in beverages, Dabur's consolidated revenue is expected to grow in low single digits. Consolidated operating profit growth is expected to marginally lag revenue growth.
The company sells brands such as Dabur Red toothpaste, Dabur Honey, Hajmola, and Dabur Honitus.
Volume growth
Godrej Consumer Products said that its standalone business is likely to deliver high-single digit value growth in the first quarter of the ongoing fiscal year on the back of mid-single digit underlying volume growth (UVG). At a consolidated level, we expect double-digit revenue growth on the back of high-single digit underlying volume growth.
Underlying volume growth is a key business metric, particularly in consumer goods sector, that measures the actual increase in the number of goods sold. It focuses only on volume, without taking into consideration price changes.
Volume growth has been strongly competitive and is sequentially improving, the company said in its quarterly update on Friday. Standalone Ebitda margin in Q1FY26 is likely to be below its normative range but is expected to improve, the company added. While palm oil prices have started easing towards the end of June, benefits of this moderation will only be realized in H2FY26, the company added in its quarterly update to the exchanges.
The company's home care business has had a broad-based growth trajectory with the business likely to deliver double-digit value growth and UVG increase. Personal care business is expected to grow value in low-single digit impacted by soaps. Standalone business excluding soaps (which is seeing a price-volume rebalancing driven by commodity volatility) is expected to deliver a very strong performance this quarter with double-digit UVG.
Edible oil maker Marico on Thursday said its India business is expected to report 'multi-quarter high" volume growth in Q1, benefiting from import duty reduction on vegetable oils.
'During the quarter, the sector exhibited consistent demand patterns, marked by improving trends in rural markets and steady urban sentiment. We expect gradual improvement in the quarters ahead, supported by easing inflation, a favourable monsoon season and policy stimulus," Marico said in its update for the June quarter released Thursday evening.
The company's underlying volume growth in the India business continued to improve sequentially to reach a multi-quarter high. Marico's consolidated revenue growth on a year-on-year basis stood in the low twenties, marking a strong start towards delivering double-digit growth on a full-year basis.
Its leading edible oil brand Saffola posted a healthy performance with revenue growth in the high twenties, backed by mid-single digit volume growth. The brand has 'proactively" passed on the benefit of the recent import duty reduction on vegetable oils to consumers. Meanwhile, its Parachute oil portfolio reported marginal dip in volumes due to high input cost and pricing conditions, it said in its update.
In June this year, the Centre reduced the basic customs duty (BCD) on crude edible oils—crude sunflower, soybean, and palm oils from 20% to 10%. This decision came after the sharp rise in edible oil prices following last year's import tax hike in September. The increase led to significant inflationary pressure on consumers, with retail edible oil prices soaring and contributing to rising food inflation.
Marico reported continued inflation in copra prices due to unseasonal rains, while vegetable oil prices dropped after import duty cuts, and crude oil derivatives stayed stable. Consequently, the company expects increased pressure on gross margins in the short term, but expects this to ease from the second half of the fiscal year.
Analysts said monthly and quarterly inflationary trends remained 'benign" for consumer staple companies, except for copra and tea prices, suggesting a gradual uptick in demand as well as easing of pressure on gross margins.
Month-on-month and quarter-on-quarter inflationary trends suggest a benign environment for Marico's raw material basket except for brent crude (up 12.2% month-on-month but still down 20.2% year-on-year) and copra (up 24.1%—18.7% quarter-on-quarter—month-on-month in 1QFY26 leading to over 90% inflation year-on-year), analysts at Yes Securities said in a report released on 2 July. The brokerage said its internal consumer staples raw material inflation index reported an uptick in May 2025, up 3.4% year-on-year, led by oil seeds (including copra) and menthol, despite lower crude prices.
'Even while geopolitical tensions lifted palm oil on a month-on-month basis, both palm oil and PFAD (palm fatty acid distillate) are still down quarter-on-quarter. Agri inputs were mixed, with quarter-on-quarter softening in wheat, maize and cocoa, but copra and tea prices remain firm. Tobacco leaf prices are under pressure due to oversupply but the government is intervening," it added.
The fast-moving consumer goods industry reported an 11% year-on-year value growth in the March quarter, driven by a 5.1% volume increase and a 5.6% price hike, according to NielsenIQ.
While overall inflation is easing, high edible oil prices kept the basket of staples expensive, resulting in higher value growth. However, edible oil prices are now stabilizing.
Most companies have pointed to a recovery in demand in the second half of the year, led by favourable monsoons and tax benefits announced in this year's budget that raised exemption limit and revised personal income tax slabs.
'A meaningful and broad-based margin recovery appears more likely from 2HFY26, contingent on price stability across commodities and favourable monsoon progress," said analysts at Equirus Securities. Softening wheat, maize, and barley prices support margin stability for food players like Britannia, ITC, and Mrs Bectors Food.
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