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Rising Input Costs Threaten FMCG Margins Despite Q2 Demand Recovery
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News18•11-10-2026, 09:45
Rising Input Costs Threaten FMCG Margins Despite Q2 Demand Recovery
- •FMCG companies face margin pressures in the September quarter due to surging input costs, including crude oil, derivatives, and various commodities.
- •Brokerage ICICI Direct notes that while revenue growth remains in double digits, operating profit growth will lag due to absorbed cost inflation.
- •Deficit rainfall and food inflation raise concerns about potential moderation in rural and urban consumer demand in upcoming quarters.
- •Major players like Dabur and Godrej Consumer Products reported that inflationary pressures impacted operating margins despite ongoing cost-saving measures.
- •Marico anticipates a stronger gross margin performance year-on-year, driven by a favorable portfolio mix and copra prices remaining below peak levels.
Key Questions Answered
Operating margins are facing pressure due to a sharp rise in crude oil and crude-derivative packaging prices, persistent commodity inflation, and deficit rainfall affecting farm and rural demand.
Companies like Dabur and Marico expect double-digit revenue growth for the September quarter, supported by core businesses and improving demand across select categories.
FMCG firms are responding through calibrated price increases, changes in product mix, procurement efficiencies, and ongoing cost-saving initiatives to cushion the impact of inflation on their margins.
