Even as geopolitical tensions disrupt exports and pressure margins, healthy domestic demand fuels double-digit FMCG growth
India’s fast-moving consumer goods (FMCG) sector delivered a resilient performance in the fourth quarter of the financial year 2026, clocking double-digit growth across several segments even as geopolitical tensions, particularly in the Middle East, disrupted global trade flows and supply chains. Growth was largely volume-led, with major players reporting high-single to double-digit expansion, supported by urban premiumisation, improving rural traction and rapid scale-up of alternate channels such as ecommerce and quick commerce.
While exports faced disruptions due to geopolitical uncertainties, domestic businesses helped cushion the impact, with categories like home and personal care, edible oils, value-added foods and health-focused products outperforming. Rising crude-linked input costs and supply chain challenges kept margins under watch, as the companies remain cautiously optimistic about a gradual demand recovery in the coming quarters.
Double-digit Momentum
Dabur India indicated a sequential recovery in consumption, with its India FMCG business expected to post high-single digit growth, supported by continued strength in home and personal care, even as geopolitical tensions in the Middle East weighed on international operations. In a similar vein, Godrej Consumer Products projected double-digit revenue growth at a consolidated level, underpinned by strong performance across key categories.
“Q4 was a clear volume-led growth quarter, with strong volume momentum, while value growth remained softer due to GST-driven price rationalisation in various categories. While external trackers like Nielsen may reflect muted growth at MRP levels, net sales realisation remained healthy,” Mayank Shah, Chief Marketing Officer, Parle Products, told BW Businessworld.
Meanwhile, Marico said that its India business reported high-single-digit underlying volume growth with a gradual improvement in consumption trends, even as it flagged the evolving geopolitical situation as a key monitorable for the quarters ahead. The company noted that consolidated revenue grew in the low twenties year-on-year during the quarter. AWL Agri Business stood out with double-digit volume expansion, led by strong performance in edible oils and a sharp scale-up in alternate channels such as ecommerce and quick commerce, although its Food and FMCG segment growth remained subdued due to export-linked factors.
Beyond the listed players, emerging and mid-sized companies echoed similar topline trends. Firms pointed to steady, volume-led growth driven by deeper rural penetration, improving distribution reach and continued premiumisation in urban markets.
“The food business, both confectionery and spices, has had a healthy double-digit growth and is ahead of the industry. Though all the sub-segments of sugar confectionery have grown last year, Jellies (soft candy) is the fastest growing sub-segment in the sugar confectionery segment. The overall spices category performed well during the quarter,” Jyotiroop Barua, Business Head, Confectionery, DS Group, told BW Businessworld.
Core Categories Aiding Growth
Within home and personal care, companies like Dabur saw strong traction in categories such as hair oils, shampoos and home care. In foods, staples like edible oils and packaged essentials remained resilient, with players such as AWL Agri Business reporting broad-based growth across oils, including soybean, mustard and rice bran, alongside improving traction in wheat and rice portfolios.
At the same time, the shift towards health and wellness became more pronounced across categories. Companies reported strong demand for products positioned around purity, nutrition and clean-label ingredients, with segments such as honey, juices, and traditional staples witnessing steady growth. This was also visible in the rising traction for healthier snacking and better-for-you offerings, as consumers increasingly prioritised quality and ingredient transparency.
“The clearest story this quarter was in healthier snacking. Our TBH ‘Better for You’ range saw strong outperformance and that really mirrors what we are seeing in the market. Consumers are increasingly mindful about what they eat and actively seeking out guilt-free options. Our Star staples also held up well, driven by a consistent consumer preference for quality and value,” highlighted Salloni Ghodawat, Chief Executive Officer, Ghodawat Consumer.
In parallel, premiumisation continued to shape urban consumption, with high-growth pockets emerging in value-added hair oils and premium edible oils. Convenience-led consumption also remained a defining theme during the quarter. Ready-to-eat and ready-to-cook formats, frozen foods and quick meal solutions saw robust demand, particularly in urban markets, driven by changing lifestyles and also constraints on the LPG supply front.
“The quarterly performance showed different results across various categories because customer segments who used time-saving products, together with growing trends of their consumption patterns, showed better business results,” stated Haresh Karamchandani, Managing Director and Group Chief Executive Officer, HyFun Foods.
Exports Under Pressure
Companies with exposure to the Middle East flagged supply chain bottlenecks and demand disruptions, even as other international markets helped cushion the impact. Dabur, for instance, noted that heightened tensions in the region affected its overseas business, though markets such as Turkey, Bangladesh and the UK continued to deliver steady growth.
“Each market contributed positively, apart from the Gulf region, which was impacted by ongoing geopolitical headwinds in March,” Marico said in its quarterly update. GCPL noted that the GAUM (Godrej Africa, USA and Middle East) business continues to deliver strong results, with double-digit sales growth and high-single volume growth. For companies with a sharper domestic focus, the impact remained limited, although caution persists.
“Export demand stayed constant throughout the quarter. The Middle East remains an important market; however, ongoing geopolitical tensions have led to some slowdown in container movement and deliveries,” Karamchandani added.
While geopolitical volatility continues to weigh on global trade flows, FMCG firms are relying on diversified market exposure and strong domestic demand to navigate the uncertainty. Performance on the exports front will be a key monitorable in the coming quarters.
“Urban markets continue to lead premiumisation, especially via modern trade and ecommerce, while non-metro and rural markets are catching up steadily with better access and awareness. This growing convergence of intent and accessibility is helping move the category from niche to more mainstream consumption,” highlighted Arvind Patel, Managing Director, Bharat Vedica – A Patel Venture.
Input Cost Pressures And Way Forward
Marico explained that among key inputs, copra prices corrected around 35 per cent from their peak and is expected to be rangebound in the coming months. While vegetable oils and crude-sensitive materials exhibit a pronounced upward bias, the company will continue to judiciously exercise the pricing power of its franchises to alleviate the impact of the same, while maintaining assured availability of crude-linked inputs.
GCPL added that with Brent crude at between USD 100 and USD 110 and palm at between 4,500 and 4800 Malaysian Ringgit (MYR), it expects a cost hit of 6 to 9 per cent. The company noted that it should be able to offset the impact of most of these cost increases through pricing, cost savings, leverage and some prudent media optimisation.
“On margins, while input costs remain dynamic, operational efficiencies through integrated supply chain and scale should support gradual improvement. Overall, we see steady consumption growth rather than sharp spikes, with long-term tailwinds coming from changing lifestyles, increased protein awareness and expansion of cold-chain infrastructure,” emphasised Deepanshu Manchanda, Founder and Managing Director, Zappfresh.
Even as geopolitical uncertainties and input cost pressures persist, companies are leaning on stronger domestic fundamentals, diversified portfolios and sharper execution across channels to sustain momentum.
