After a few lackluster quarters, consumer staples firms are seeing a recovery in demand, led by the GST reforms, higher festive demand, coupled with cooling inflation. Experts have added that volume growth has seen an uptick over the December quarter, with grammage additions and a favourable winter, boosting sales across categories.
According to Motilal Oswal, this quarter, as a result of the festive-led demand recovery across discretionary and consumption-linked sectors, the consumer sector could post an eight-quarter high earnings growth of nine percent.
Companies’ third quarter commentary bolstered the optimism on a solid demand recovery ahead. While rural demand has remained resilient, urban demand is likely to improve going ahead, with analysts expecting the fourth quarter to see continued positive momentum.
FMCG firms have also shared expectations of rising sales and an improvement in consumption patterns across customer segments. “We remain optimistic about a gradual improvement in consumption in the quarters ahead, supported by easing inflation, lower GST rates driving affordability, MSP hikes, and a healthy crop sowing season,” said Marico.
During the quarter, the Parachute Coconut Oil producer added that the underlying volume growth in its India business remained in high single digits, while marking a slight improvement on a sequential basis.
Dabur India, too, said that early signs of demand recovery were witnessed, aided by GST rate revisions. “In the month of October 2025, distributors and retailers focused on liquidating the existing higher-priced inventory in the channel [following the GST rationalisation]. Post trade stabilisation, consumer sentiment improved in urban and rural areas. Rural demand continued to outperform urban demand this quarter as well,” the Chyawanprash maker noted.
Godrej Consumer Products is “confident of a gradual improvement in consumption over the coming quarters, supported by falling inflation and improving affordability following lower GST rates.” As a result, the firm is pencilling in double-digit revenue growth for the December quarter, as a result of near double-digit underlying volume growth.
Festive demand and soaring gold prices also supported Titan’s topline for the quarter, with its jewellery portfolio jumping 41 percent year-on-year, showcasing an increased demand for consumer discretionary products.
On the apparel front, Trent recorded a YoY revenue growth of roughly 17 percent. Further, the retail giant opened 65 stores during the quarter, as demand for value retail continued on an upwards trajectory.
For the upcoming quarter, the recovery in the segment is likely to continue. Studies showcase that India is among the most optimistic consumer markets for 2026, leading brokerages to believe that the slump in consumption has bottomed-out, with rising volumes ahead.
