India's fast-moving consumer goods (FMCG) sector has shown promising signs of a sustained recovery in the third quarter of the financial year 2025-26. Key industry players have reported expectations of volume-based growth, supported by a mid-single-digit rise in revenue and improved operating margins. This positive shift is attributed to a combination of factors including the stabilisation of GST reforms, robust festive season demand, and softening prices of raw materials.
Rural Markets Lead the Demand Recovery
Following initial disruptions as the industry adjusted to the Goods and Services Tax (GST), distributors and retailers have now cleared out higher-priced old inventory. This has paved the way for a smoother supply chain and improved consumer sentiment across both urban and rural India. Notably, rural demand has continued its trend of outperforming urban consumption this quarter, as highlighted by major companies like Dabur, Marico, and Godrej Consumer Products Ltd (GCPL). The recovery is further bolstered by organised trade channels maintaining strong momentum, with e-commerce and hyper-local delivery platforms registering strong double-digit growth.
Major FMCG Companies Report Positive Outlook
Leading firms have shared optimistic business updates for the quarter ending December 2025. Dabur India anticipates its Home & Personal care business in India to grow in double digits, led by strong performances in Hair Oils and Oral care. Key brands such as the Dabur Amla franchise, Dabur Almond, Dabur Anmol, Dabur Red Toothpaste, and Meswak are expected to record healthy volume-led growth. The company expects consolidated revenue to grow in mid-single digits, with operating profit and profit after tax growing ahead of revenue.
Godrej Consumer Products Ltd (GCPL) stated that domestic market conditions strengthened progressively during Q3. The company remains confident of a gradual improvement in consumption in coming quarters, supported by falling inflation and improved affordability due to lower GST rates. GCPL expects close to double-digit revenue growth in rupee terms and double-digit EBITDA growth at a consolidated level.
Marico Limited, owner of brands like Saffola and Parachute, expects a significant increase in consolidated revenue in the 'high 20s' percentage range for Q3, alongside margin improvement. The company noted steady demand trends, underpinned by easing inflation, beneficial GST rates, increases in Minimum Support Prices (MSP), and a healthy crop sowing season. Marico's underlying volume growth in India remained in high single digits, showing a slight sequential improvement.
Retail Sector Also Shows Strong Performance
The positive sentiment extends to the organised retail sector. Trent Ltd (Tata Group), which operates Westside and Zudio, reported a 17% growth in standalone revenue to ₹5,220 crore in Q3 FY26. Avenue Supermarts Ltd (D-Mart) saw its consolidated net profit jump 18.27% to ₹855.78 crore, while operational revenue rose 13.32% to ₹18,100.88 crore. Titan Company Ltd reported a standout 40% growth in standalone revenue, significantly driven by surging gold prices.
Overall, the FMCG industry, which had been grappling with slow consumption, now foresees a sustained recovery in demand and an improving revenue trajectory for the quarters ahead. The convergence of structural reforms, favourable macroeconomic conditions, and resilient rural demand is setting the stage for a robust growth phase in the consumer goods market.
