FMCG volume growth seen soft, early monsoon dented demand for summer-related products, says Axis Securities

Investors should also watch out for the effectiveness of recent price hikes, a crucial factor which will need to be monitored in the coming quarters.

Trade

• Watchlist
• Portfolio
• Message
• Set Alert

 

 

Choose Stock Exchange: BSE LIVE NSE LIVE

26 Aug, 2025 12:21

Volume

Todays L/H

More

×

The FMCG volume growth for the June quarter is expected to stay soft, as was the trend during the fourth quarter for the last fiscal, with rural India outperforming urban areas due to demand weakness, Axis Securities said in a note ahead of the earnings season, adding that early rains have hurt some of the summer season sales.

Consumer companies also face stiff regional competition, a rising trend of D2C brands and inventory pressures in trade channels, which has been worsened by a summer season sale that has been largely muted, the note said. "Summer-reliant categories such as beverages, ice cream, and talcum powder are likely to witness pressure this quarter," the note added, underscoring the impact of unseasonal rain and early monsoon.

The note said investors can hope for a recovery in demand and consumer sentiment in the second half of the fiscal. "Looking ahead, growth momentum is expected to be supported by monetary policy easing, income tax benefits, a healthy monsoon outlook, and government measures aimed at boosting disposable incomes, which could uplift consumer sentiment and drive demand recovery by H2FY26," said Axis Securities.

Not just volumes, even margins could stay subdued during the June quarter earnings, owing to 'elevated raw material inventory costs and subdued operating leverage', however, easing input prices could provide margin relief from Q2FY26 onward, said the Axis note.

In this context, the note has underscored Britannia and DOMS Industries to outperform peers in the FMCG pack in the June quarter earnings, while Trent and D-Mart could do well in the retail space. This is likely on account of a recovery in smaller towns which could help value retailers such as D-Mart while premium retailers like Trent and Ethos are expected to maintain growth momentum. Axis Securities said it expects Britannia to report 8% YoY revenue growth along with a 5% volume growth during the June quarter.

Investors should also watch out for the effectiveness of recent price hikes, a crucial factor which will need to be monitored in the coming quarters.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.​​​