FMCG Majors Report Steady Domestic Consumer Demand Amid Global Uncertainties

Consumer Demand Remains Steady in India Amidst Global Uncertainty

Consumer goods companies in India have reported steady demand in the fourth quarter, with sales growth expected to remain robust in the upcoming financial year 2027. According to quarterly updates shared by Marico, Dabur, and AWL Agri, the companies have flagged a stable macro environment in the domestic market, offsetting any impact from the ongoing war in the Middle East.

The sector, which serves as a premier barometer of a country's economic health, had been under pressure due to subdued urban demand, tax reliefs, and expanding disposable income of households, which helped to lift consumer demand in the recent past. Analysts remain cautious, flagging a gradual recovery but uneven growth.

Despite the ongoing crisis, consumer demand held up well in March. Four-wheeler sales grew at 22.91 percent, tractor sales remained steady in double digits, while two-wheeler sales jumped 29 percent compared to 26 percent the previous month. UPI volumes were up 23.7 percent for the month compared to 27 percent in February.

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The data also pointed to benign retail inflation in March 2026 at around 3.4%, indicating stable price pressures and supporting consumption trends.

Brokerage Motilal Oswal has cautioned that the inflationary pressure may increase, leading to lower spending. The company remains watchful of the current raw material price volatility and the levels they set will be a key monitorable. The companies with higher exposure to international markets (MENA) will be more affected than others.

The raw material pricing scenario has changed since March onwards, amidst the ongoing geopolitical pressures. Steep crude inflation and rupee depreciation will raise RM/PM costs for most staple companies, with the effect being more prominent in the first quarter of FY27.

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In response, companies have signaled potential price hikes to offset rising input costs. Parachute-maker Marico expects its India business to sustain high single-digit underlying volume growth, with a slight sequential improvement. The company's flagship hair oil brand, Parachute, is expected to deliver a gradual pickup in volume growth over the course of FY27.

Marico's international business maintained its stellar momentum, with constant currency growth in the high teens. Each market contributed positively, apart from the Gulf region, which was impacted by ongoing geopolitical headwinds in March. The company expects a double-digit operating profit growth in the March quarter, with a sequential improvement in growth.

Meanwhile, FMCG major Dabur said that strong domestic performance helped offset challenges in its key international markets, particularly the Middle East. The company expects consolidated revenues to grow in mid-single digits with operating profit growing ahead of the topline, on the back of progressive recovery in domestic demand, driven by improving consumption trends.

AWL Agri Business Limited, market leader in edible oil, recorded a double-digit growth in volumes, led by strong growth in edible oil and industry essentials, supported by stable consumer demand, and gradual improvement in distribution. The company's edible oil portfolio continued to demonstrate strong performance, delivering a robust 17% YoY volume growth in Q4'26.