FMCG companies optimistic about gradual improvement in consumption

Leading FMCG companies are confident of a gradual improvement in consumption over the coming quarters, supported by lower inflation and improved affordability following a decline in Goods and Services Tax (GST) rates.

In a quarterly update, Godrej Consumer, maker of ‘Good Knight’ mosquito repellent, said demand conditions in India gradually strengthened during the third quarter.

“We remain confident of the gradual improvement in consumption over the coming quarters, supported by lower inflation and improved affordability following the decline in GST rates,” she said.

Echoing similar sentiments, Marico, maker of Parachute hair oil and edible safflower oil, said in its Q3 update that it remains optimistic about the gradual improvement in consumption in the coming quarters, supported by easing inflation, lower GST rates leading to affordability, higher medium support prices, and a healthy crop growing season.

Fast-moving consumer goods player Dabur, in its third-quarter update, said it saw early signs of demand recovery, supported by GST rate revisions.

Consumer sentiment improved in both urban and rural areas after trade stabilized, according to Dabur. Rural demand continued to outperform urban demand during the quarter as well, he added.

The new GST rates, which were implemented on September 22, 2025, reduced taxes on consumer products such as toothpaste, hair oil, shampoo, soap and biscuits to 5% from 18% previously. This led to turbulent inventory levels in the third quarter.

“In October 2025, distributors and retailers focus on liquidating the existing higher-priced inventory in the channel,” Dabur said.

Dabur expects the organized commerce channel to maintain its strong growth momentum, with e-commerce, including e-commerce, expected to grow in strong numbers.

Meanwhile, Marico expects operating profit growth to reach double digits year-on-year. “Among the key inputs, copra prices corrected 30% from their highs, and are expected to show a downward bias in the coming months, followed by the flow season. Vegetable oil prices remained at elevated levels, while crude oil derivatives were benign. Given the above, we expect a slight uptick in gross margin on a sequential basis, after bottoming out in the previous quarter. We expect further gross margin improvement in the coming quarters, driven by a delay in passing on coconut costs,” she said. dried”.

Godrej Consumer said its standalone business is well positioned to deliver double-digit revenue growth for the quarter, supported by near double-digit underlying volume growth.