Fast Moving Consumer Goods (FMCG) companies in India are facing a tough financial period, as high production costs and food inflation have squeezed their profit margins in the July-September quarter. Major players, including Hindustan Unilever Limited (HUL), Godrej Consumer Products Limited (GCPL), Marico, ITC, and Tata Consumer Products Limited (TCPL), are now considering product price hikes to offset rising expenses on raw materials like palm oil, coffee, and cocoa.
One of the biggest challenges for these companies is the drop in urban consumption, which has traditionally accounted for around 65-68 percent of FMCG sales. Meanwhile, rural markets have shown more resilience, maintaining steady growth despite economic pressures.
GCPL’s CEO Sudhir Sitapati noted in the company’s quarterly results that they view these issues as temporary and plan to handle costs strategically while carefully increasing prices to recover margins. Despite market challenges, GCPL’s key brands—such as Cinthol, Godrej No. 1, and HIT—reported stable performance over the quarter.
Similarly, Dabur India, known for products like Dabur Chyawanprash, Pudina Hara, and Real Juice, reported a 17.65 percent drop in profit, bringing it to Rs 417.52 crore, with revenue falling 5.46 percent to Rs 3,028.59 crore. Nestlé India’s Chairman Suresh Narayanan highlighted that rising prices of fruits, vegetables, and oils are putting pressure on household budgets, which affects spending on middle-range products. Despite this, Nestlé’s domestic sales saw a 1.2 percent growth.
TCPL CEO Sunil D’Souza and HUL’s CEO Rohit Jawa both noted weaker consumer spending in urban areas, but rural areas continued to perform strongly, helping balance some losses in city markets.
