FMCG companies optimistic about gradual improvement in consumption

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

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

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

Echoing a similar sentiment, Marico, the maker of Parachute hair oil and Saffola edible oil, said in its third quarter update that it remains optimistic of gradual improvement in consumption in the coming quarters, supported by lower inflation, lower GST rates favoring affordability, MSP hikes and a healthy sowing season.

FMCG player Dabur, in its third quarter update, said it has seen early signs of recovery in demand, aided by revisions in GST rates.

Consumer confidence has improved in urban and rural areas following stabilization of trade, according to Dabur. Rural demand also continued to outpace urban demand this quarter, it adds.

The new GST rates, implemented from 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 a disruption in inventory levels in the third quarter.

“In October 2025, distributors and retailers focused on liquidating existing stocks at higher prices in the channel,” Dabur said.

Dabur expects the organized commerce channel to maintain its strong growth momentum, with e-commerce, including quick commerce, expected to witness strong double-digit growth.

At the same time, Marico expects operating profit growth to be double-digit on an annual basis. “Among key inputs, copra prices have corrected 30% from highs and are expected to show a downward trend in the coming months, followed by the flushing season. Vegetable oil prices remained at high levels, while crude oil derivatives were benign. Due to the above, we expect a sequential increase in gross margin, after hitting a low point in the previous quarter. We expect further margin improvement gross in the coming quarters, thanks to the delayed pass-through of lower copra costs,” he said.

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