FMCG firms look for volume-based growth in FY’27

New Delhi: Leading fast moving consumer goods (FMCG) companies expect volume driven growth to take centre stage in the next fiscal year, supported by easing inflation and stable commodity prices that have begun to ease pressure on margins.

In the December quarter, leading FMCG companies reported mid- to high single-digit volume growth. On their latest earnings calls, the industry captains said the operating environment is turning more favourable after several quarters of volatility. Key inputs such as edible oils, wheat, copra and surfactants softened, and with macroeconomic tailwinds including GST rationalisation, higher MSPs and a healthy crop season, FMCG makers anticipate sustained demand recovery.

Most players have already taken calibrated price hikes earlier in the fiscal year and now expect growth to be led by volumes rather than pricing.

Some companies indicated they may pass on some benefits of lower input costs to consumers through offers, increased grammage or selective discounts, even as they maintain caution on any residual rollover impact of past price increases. With inflation cooling and consumer sentiment improving, companies such as Dabur, Marico, Britannia, HUL and GCPL expect EBITDA margins to strengthen in the coming quarters. Industry leaders say FY’27 is likely to be better than the current fiscal, driven by stable commodities, easing cost pressures and a broad based recovery in consumption.

“As far as inflation is concerned, we saw huge inflation in Quarter 3. Inflation is ebbing a bit, as we see.