“The continuous improvement in volume growth and revenue growth that led to Godrej Consumer Products’ Dabur and Marico updating investors’ sentiment,” said research analyst-FMCG, Anand Rathi Institutional Equities. “A good monsoon supports rural demand, and the increased urban demand also supports sentiment.”
The NIFTY FMCG index rose 1.7% on Monday, but the benchmark NIFTY remained flat. Of the 15 shares in the FMCG index, 13 altitudes and two stocks decreased.
Godrej Consumer jumped 6.4%, leading the FMCG stock profits. Dabur rose by 3.5%, while Hul and Emami rose by 2.5% each. Britannia Industries rose 2.1%, while Varun Beverages and Tata Consumer rose 1.7% and 1.5% respectively. The second half of FY26 is expected to see stronger volume pickups, but profits could be limited to stocks offering better growth outlook.
“The positive guidance was primarily aimed at Godregi’s consumers and Mariko, but since FMCG stocks were beaten, other stocks have also risen in hopes of a recovery.” “We expect better in the second half, but Q1 is expected to be muted.”
Godrej Consumer Products said its volume growth has been improving since the last quarter in its quarter update, and the company expects double-digit rupee revenue growth against the backdrop of single-digit high volume growth. “We were hoping for Dabur’s growth to decline, but the company is hoping for a single-digit growth rate drop, which could be optimistic in an otherwise inactive quarterly update,” Purohit said. So far, the NIFTY FMCG index has dropped by 2%, while the benchmark NIFTY has scored 7.7% in the same period. Thakur said Dabur’s ratings are attractive, but prefers Godrej’s consumers over the large CAP FMCG stocks.
Purohit said investors should focus on specific stocks in the sector based on reported growth.
“The Godrej Consumer products and Marico are clearly outstanding and there is a high chance that these stocks will increase as they respond to market growth,” Purohit said. “Other stocks could rise as the story around government focuses on consumption, a good monsoon and the basic effects of unfolding.”
