FMCG sector Q1 results preview: Healthy topline growth likely, margin to be resilient despite inflation pressure

The Fast Moving Consumer Goods (FMCG) companies are expected to report strong earnings in the first quarter of FY27, with healthy revenue growth and negligible margin pressure. The sector is likely to deliver resilient performance despite severe headwinds, including the US-Iran war in the Middle East, which lifted raw material inflation.

Analysts estimate FMCG companies to report healthy revenue growth in Q1FY27, on account of steady volume growth amid stable demand conditions and timely price hikes. Both rural and urban demand are expected to have remained resilient, with no major divergence.

Margin pressure is expected to remain largely contained, as higher input costs — primarily driven by crude oil-linked derivatives and palm oil—as well as elevated advertising and promotional (A&P) spending are likely to be offset by the benefit of lower-cost inventory and recent price hikes. However, analysts expect margin pressure to become more pronounced in Q2FY27.

Per FMCG players’ pre-quarterly business updates, overall demand conditions were stable in the April-June quarter of FY27, partly helped by easing of tensions in West Asia and the consequent decline in crude prices. Going forward, the impact of El Niño on the monsoon is a key monitorable.

Here’s how top FMCG companies are expected to perform in Q1FY27:

Hindustan Unilever Q1 Results Preview

Hindustan Unilever (HUL) is expected to report a net profit of ₹2,752 crore in Q1FY27, registering a growth of 10.5% from ₹2,490 crore in the year-ago period. Revenue is expected to grow 4.7% to ₹16,688 crore from ₹15,931 crore, year-on-year (YoY), according to estimates by Kotak Institutional Equities.

At the operating level, EBITDA is expected to rise 9% to ₹3,879 crore from ₹3,558 crore, while EBITDA margin is estimated to expand by 91 basis points (bps) to 23.2% from 22.3%, YoY.

HUL’s organic business is expected to deliver 9% revenue growth, led by a 6% volume growth. Analysts expect revenue growth of 12% in home care, 6% in personal care, 13% in Beauty and Wellbeing, and 8% in F&B.

ITC Q1 Results Preview

ITC’s cigarette business performance in the June quarter was impacted by the transition to a new taxation structure, which led to sharp price hikes. Analysts estimate cigarette volume to decline 9% and net sales to drop by 20% YoY. Cigarette EBIT is estimated to decline 32% YoY, largely due to inadequate price hikes to fully protect profitability.

FMCG segment of ITC is estimated to report 12% YoY revenue growth, with EBIT margin projected to improve 110 bps YoY to 8%. Agri business revenue is estimated to decline 50% YoY, significantly impacted by the US-Iran war in West Asia. EBIT margin is estimated to remain stable at ~5%. Paperboards revenue growth is projected at 11% YoY, as the demand environment gradually stabilized, according to Kotak Equities.

Overall, ITC’s revenue is expected to decline 17.5% YoY to ₹16,289 crore, while net profit is seen declining 24% YoY to ₹3,738 crore.

Nestle India Q1 Results Preview

Motilal Oswal expects Nestle India to report 18.4% YoY consolidated revenue growth at ₹6,036 crore, with domestic business expected to grow 18% YoY, led by a healthy mix of volume and pricing. The growth is supported by the normalization of trade post-GST implementation.

The company’s net profit is estimated to jump 30.5% to ₹844 crore in Q1FY27, while EBITDA margin is likely to expand by 60 bps YoY to 22.8%.

Britannia Industries Q1 Results Preview

Britannia Industries is estimated to see improvement in volume growth to 7.5% YoY aided by some recovery in market share.

According to Kotak Equities, the company’s revenue is expected to grow 9% YoY to ₹5,033 crore, while net profit is estimated to 21.7% YoY to ₹634 crore. EBITDA is expected to increase 19.4% YoY to ₹904 crore, while EBITDA margin may improve by 158 bps to 18%.

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