Report states that the companies are expected to increase prices by atleast 3 to 4 per cent in Q1FY27 in case the current inflation in raw materials persists
As a sharp rise in crude oil prices and a weakening Rupee have increased input cost pressures, fast-moving consumer goods (FMCG) companies are expected to implement a fresh round of prices increases in the first quarter of the current financial year (Q1FY27), as per a report by Nuvama Institutional Equities.
The report added that the companies are expected to increase prices by atleast 3 to 4 per cent in Q1FY27 in case the current inflation in raw materials persists. Media reports cited Nuvama and stated that the impact on the last quarter of FY26 is likely to be limited.
The pressure is most acute in sectors like paints, edible oils, soaps and detergents, as per the report. The companies in these sectors may opt for an even steeper price adjustment. The packaging costs have also increased, adding to the concerns for the companies.
As the conflict in West Asia disrupts supply chains and drives up crude prices, India’s inflation outlook is again causing worry for households. As the consumer goods companies weigh price hikes, quantity cuts, reports from various agencies suggest that India is expected to see higher inflation in FY27.
The average consumer price index inflation is anticipated to more-than-double to 4.3 per cent in FY27 from the 2.1 per cent estimated for FY26, with risks tilted to the upside owing to the extent of the revision in retail fuel prices as well as potential El Nino developments in the latter part of the fiscal, Icra said.
Earlier, even Centre warned that oil price shock poses an unexpected upside risk for inflation in the medium term. Supply disruptions and higher input costs are being transmitted into domestic prices, particularly in fuel-intensive sectors, the government said.
