Archive · 6 Oct 2026
Strong FMCG Demand Meets Diverging Margins as Weak Monsoon Looms
Many everyday-goods companies are seeing strong customer demand.
But they do not all pay the same prices for the ingredients and materials they use.
Marico is benefiting because copra, used in coconut oil, is much cheaper than its peak price.
Other companies, including Dabur India and Godrej Consumer Products, face higher costs for some materials.
Honasa Consumer expects growth as its business becomes more efficient.
India’s monsoon rainfall was much lower than average.
This could make life harder for farmers and reduce spending in rural areas.
It could also affect the costs of some materials later in the year.
So strong sales may not mean the same profit growth for every company.
FMCG demand is holding up in Q2 FY27, but rising and falling input costs are producing different margin outcomes across companies.
Marico benefits from copra prices about 35% below their peak, while Parachute Coconut Oil volumes grew in the early teens.
Dabur India and Godrej Consumer Products face inflation in crude-, palm- and other commodity-linked inputs.
Honasa Consumer expects early-thirties net sales value growth and an early double-digit operating margin, supported by scale gains.
The monsoon ended at 87% of its long-period average, raising concerns about rural demand and some input costs in the second half.
- Who
- Marico, Dabur India, Godrej Consumer Products, and Honasa Consumer.
- What
- FMCG companies face different margin prospects despite resilient demand, with input costs and weak monsoon conditions shaping their outlook.
- When
- Q2 FY27, with additional risks expected in the second half.
- Where
- India.
- Why
- Commodity costs are affecting companies differently, while weak rainfall may pressure rural demand and some raw-material supplies.
Factors supporting margins
Factors pressuring margins
Input costs
Factors supporting margins
Marico’s lower copra costs are supporting gross-margin expansion, and Honasa expects scale gains and operating leverage to help profitability.
Factors pressuring margins
Dabur India and Godrej Consumer Products face inflation in crude-, palm- and other commodity-linked inputs; weak rainfall could also eventually affect some raw-material supplies.
Demand outlook
Factors supporting margins
Analysts and company outlooks point to resilient demand, including growth in Marico’s key oil categories and Dabur’s domestic FMCG business.
Factors pressuring margins
The weak monsoon could hurt farm output, rural sentiment and consumption, with particular demand concerns for rural-facing businesses and household insecticides.
- Monsoon rainfall
- The south-west monsoon ended at 87% of the long-period average, its weakest since 2015.
- Marico copra costs
- Copra was about 35% below its peak.
- Parachute share of Marico revenue
- The brand accounts for approximately 35–36% of domestic revenue and 27–28% of consolidated turnover.
- Marico outlook
- The company expects operating profit growth in the mid-twenties and double-digit underlying India volume growth.
- Godrej Consumer Products outlook
- The company expects high-teen consolidated revenue growth and double-digit EBITDA growth.
- Dabur outlook
- Dabur expects double-digit revenue and profit growth, while higher costs are likely to weigh on operating margins.
- Honasa Consumer outlook
- The company expects early-thirties net sales value growth and an early double-digit operating margin.