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FMCG shares in focus; HUL, Dabur, Bajaj Consumer rally up to 8%; here's why
Shares of fast moving consumer goods (FMCG) companies were in focus today, with the BSE FMCG index gaining 1 per cent in an otherwise subdued market as the sector witnessed uptick in volumes and sequentially recovery in demand particularly in urban markets.
Bajaj Consumer Care, Godrej Consumer Products, Dabur India, Jyothy Labs and Hindustan Unilever (HUL) were trading higher in the range of 2 per cent to 8 per cent in intra-day trade. Colgate-Palmolive, Emami, Marico, Britannia Industries and ITC were up 1 per cent each.
At 10:27 AM; the BSE FMCG index, the top gainer among sectoral indices, was up 1.1 per cent, as compared to 0.09 per cent decline in the BSE Sensex.
However, thus far in the calendar year 2025, FMCG index has underperformed the market by falling 2.2 per cent, as against 6.2 per cent rally in the benchmark index. Track Stock Market LIVE Updates
Improvement in business performance
Dabur India said during the April - June quarter (Q1FY26), the Indian FMCG sector witnessed a sequential recovery in demand with uptick in volume growth particularly in urban markets. With the refreshed strategic vision and favourable macroeconomic conditions such as above average monsoon, good agricultural output, easing inflation and consumption-focused government measures, Dabur India's management expects revenue growth to regain momentum and trend higher in the coming quarters.
Godrej Consumer Products' management has maintained its stance of sequential improvement in the performance. For FY26 it expects high single-digit revenue growth with mid-to-high single digit volume growth on a standalone basis and double digit EBIDTA growth (with margins expected to improve in H2FY26).
ICICI Securities expects soap sales volume to recover in H2FY26 with base getting normalised. India business is recovering and Africa is performing well post restructuring. The company has to revamp its strategy of Indonesia business to revive growth.
Meanwhile, domestic beverage business will be a drag on Dabur's Q1FY26 performance. Improved rural demand and uptick in urban demand augurs well for the sector and recovery in Dabur's performance in the coming years. However, rising competition in some of the categories such as beverages, home care and oral care will keep a check on the recovery and the profitability in the coming quarters, the brokerage firm said in a note.
Elara Capital view on FMCG sector
FMCG demand remained steady in Q1FY26, though weak urban consumption and an early monsoon impacted summer-centric categories such as beverages and cooling products (hair oil and talc). A few companies are expected to benefit from pricing-led growth, particularly in essentials such as tea, biscuits, and oils, while others may face pressure due to weak summer sales and increased competition in oral care. Higher input costs are likely to weigh on margins, with most companies expected to report a contraction in profitability.
Marico, Tata Consumer Products, Mrs. Bectors Food, and Britannia are likely to post double-digit revenue growth, driven largely by pricing in categories such as coconut oil, edible oil, tea, salt, and biscuits. Marico and Britannia are expected to deliver above-average volume growth, while Colgate, Emami, Dabur, and Varun Beverages may report a decline/flat growth in volume, impacted by weakness in the summer portfolio and heightened competitive intensity in toothpaste for Colgate, Elara Capital said in its Q1FY26 preview.
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