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Consumption – FMCG Demand environment remained stable; inflated crude to dent margin for most

ICICIdirect Research 09 Oct 2026 DISCLAIMER

Domestic demand environment remained stable in Q2FY27 in the backdrop of below par monsoon and rising inflationary environment.
Marico, Godrej Consumer Products and Dabur are expected to report double digit revenue growth (in range of 10-20%YoY) with volume growth expected to remain at high single digit to low double digit.
Spike in the crude oil/crude derivative prices coupled with increase in the other key input prices will have impact on the EBIDTA margins of most of the home care and personal care companies under coverage. Exception will be Marico, which is likely to witness improvement in the EBIDTA due to correction in the copra prices and improved mix towards high margin products.
Outlook: We expect Q2FY27 performance for most FMCG companies to be mixed bag with revenue growth expected to be in double digit while EBIDTA growth will be lower compared to revenue growth due to spike in the commodity prices. Lesser rainfall in most of part of India is likely to affect the farm output and would lead to moderation in the rural demand. Further spike in the food inflation might have impact on the urban demand in the quarters ahead. Also inflated input prices will put dent on margins in H2FY27. In FMCG space we continue to prefer food companies such as Nestle India.
 
Jewellery Companies – posted decent performance in Q2FY27
Despite shift in festive season to Q3, volatility in gold prices and uncertain macro environment, jewellery companies posted decent performance in Q2FY27 with most companies delivering revenue growth in the range of 20-30%.
Titan’s domestic business grew 22% YoY, led by 21% YoY growth in domestic jewellery. Standalone domestic jewellery (Tanishq, Mia, Zoya and beYon) grew 20% YoY, while CaratLane grew 32% YoY. Other businesses such as eyecare and watches registered 28-30% growth.
Amongst the other jewellery players Kalyan Jewellers, Senco Gold and PNG Jewellers registered revenue growth of 26%, 31% and 22% respectively driven by double digit same-store-sales growth.
Outlook: Q2 witnessed moderation in revenue growth due to shift in festive season to Q3FY27. However the companies are confident of witnessing strong improvement in the revenue growth in H2FY27 on back of upcoming festive and wedding season. Demand momentum for jewellery segment has remained buoyant. Studded jewellery are growing ahead gold jewellery during the quarter. Titan remains our top pick in the space.

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