India’s fast-moving consumer goods (FMCG) sector continued to demonstrate resilience in the fourth quarter of FY26, despite mounting input cost pressures stemming from the ongoing conflict in West Asia, according to a report by Anand Rathi.
The brokerage noted that the sector delivered a robust revenue performance during the quarter, driven by improving demand trends, selective price increases and sustained premiumisation across product categories.
FMCG companies collectively posted revenue growth of 11 per cent in Q4FY26, compared with 8 per cent growth for the full fiscal year, the report said. While performance varied across companies due to category-specific challenges and weather-related disruptions, most players reported positive top-line expansion.
“Demand has remained resilient despite input inflation headwinds,” Anand Rathi said in its report.
The growth was supported by a recovery in volumes, aided by GST-related tailwinds, wider distribution reach and continued product innovation initiatives. The report added that the normalisation of volumes following GST-related inventory and pricing adjustments also helped sustain growth momentum.
However, the sector is facing renewed pressure from rising commodity costs. Selective commodity inflation resurfaced during the quarter, largely due to geopolitical tensions in West Asia, prompting several FMCG companies to raise prices by 3–10 per cent to protect margins and maintain profitability.
Looking ahead, Anand Rathi flagged weather-related risks as a key concern for the sector. El Niño conditions are expected to emerge during the monsoon season, while the India Meteorological Department (IMD) has forecast a below-normal monsoon in 2026, with rainfall likely to be around 10 per cent below the Long Period Average (LPA).
A weaker monsoon could adversely affect rural incomes and consumption, which remain critical drivers of demand for FMCG products, the report cautioned.
The brokerage also highlighted that disruptions caused by GST-related inventory and pricing realignments, which impacted the second quarter, eased significantly in the third quarter and were fully normalised by the fourth quarter.
Despite concerns around rising input costs and monsoon uncertainty, Anand Rathi maintained that demand conditions in the FMCG sector remain healthy, supported by volume recovery, premiumisation trends and strategic pricing actions undertaken by companies.
(With inputs from ANI)
