Consumer goods companies are beginning to see early signs of demand revival, especially in urban areas, with executives noting the possibility of further improvement in the second quarter of FY26.
“From a demand side, things are looking better,” said Abneesh Roy, Executive Director at Nuvama Institutional Equities. He noted that while rural demand is holding up well, urban discretionary categories such as quick-service restaurants (QSRs) and apparel remain under pressure. However, easing food inflation, tax rebates, and interest rate cuts could support consumption in cities going forward.
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Companies like Marico and Tata Consumer reported stable volumes in the previous quarter, with Marico showing 7% volume growth. Tata Consumer shared India volume numbers for the first time, reporting a 6% rise. Roy said, this points to a modest recovery, but raw material costs – including tea, copra, and palm oil – still need to be watched closely.
On Dabur India, Roy noted that while it’s early to talk about the quarter one, the base is favourable and the company is aiming for high single-digit to low double-digit sales growth in FY26. “They need to do much more,” he said, referring to innovation, direct-to-consumer (D2C) strategy, and managing portfolio pressure from competition like Campa Cola in fruit juices.
Roy was also optimistic about United Breweries
, pointing to multiple first-quarter tailwinds. “The heat wave will help,” he said, adding that the company is coming off a soft base and has seen a price hike in Telangana after four years. With premium products expanding and capacity increases in Rajasthan, he expects margin improvement in FY26.
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On the recently concluded India-UK FTA, Roy said it would benefit liquor companies importing Scotch. “Some price cuts will happen,” he said, as raw material duties fall from 150% to 75%. That could improve affordability and volumes, though he cautioned that state tax changes or aggressive price cuts might limit margin gains.
On Godrej Consumer, Roy said margin pressures could persist for another one or two quarters. “Palm oil has corrected, but PFAD hasn’t,” he noted. He expects improvement in the Hi brand once the heatwave eases and sees opportunities in air fresheners and deodorants through disruptive pricing.
Among other names, he sees Pidilite Industries as a top pick, noting stability during leadership transition. He expects Britannia to benefit from a good wheat crop in FY26. On the other hand, Asian Paints may post weak numbers due to urban slowdown, and Titan could face pressure from margin headwinds and competitive intensity.
For the full interview, watch the accompanying video
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