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Companies Hit By Inflation As Production Costs Rise And Profits Expected To Drop
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News18•11-10-2026, 10:59
Companies Hit By Inflation As Production Costs Rise And Profits Expected To Drop
- •Rising prices of raw materials and commodities have significantly increased production costs for FMCG companies, threatening their September quarter profits.
- •Brokerage firm ICICI Direct reports that a surge in crude oil, packaging material, and commodity prices is squeezing company margins.
- •Deficient rainfall in several regions raises concerns over agricultural production and rural demand, impacting overall business growth.
- •Major players like Dabur India and Marico project double-digit revenue growth despite ongoing inflationary pressures across various product categories.
- •Companies are utilizing phased price hikes and cost-saving measures to mitigate the impact of inflation on their operating margins.
Key Questions Answered
A sharp rise in the prices of raw materials, crude oil, and packaging commodities has significantly increased production costs. Consequently, while many companies expect double-digit revenue growth, operating profit growth is lagging behind.
Companies are implementing phased, calibrated price hikes and cost-saving efforts, alongside managing favorable product mixes to help cushion the impact of inflation. Marico also noted that copra prices remaining below peak levels have supported gross margins.
Deficient rainfall in several regions of the country is feared to negatively impact agricultural production and rural consumption. Additionally, rising food inflation poses potential risks to urban demand.
