The FMCG sector is witnessing a broad-based recovery as GST 2.0 related disruptions settle down, with inventory levels normalising across regions and companies resuming full-capacity production. According to latest industry reports, supply chains are functioning smoothly and pricing inconsistencies have been resolved. Zydus Wellness confirmed that issues related to old packaging and mixed pricing have been largely streamlined, while Dabur India expects stronger performance in the second half of the fiscal year, targeting mid-to-high single-digit growth. The recovery extends beyond core FMCG categories, with rural demand continuing to outperform urban demand, supported by stable incomes and improved distribution reach.
AWL Agri Business Ltd reported 5% value growth and low single-digit volume growth for the quarter ended December 31, 2025 (Q3FY26), according to the company's exchange filing and preliminary quarterly business update. The performance was led by higher volumes in the edible oil and food & FMCG segments, while overall results were impacted by a 7% decline in the Industry Essentials segment due to weak castor and de-oiled cake sales. The company noted that festive demand remained muted during the quarter as trade operated with lean inventory levels. This performance aligns with the broader sector recovery, as edible oil demand from biscuit, bakery, and snack manufacturers has normalised and is showing steady growth.
The company's performance varied significantly across business segments during Q3FY26. The Edible Oil segment demonstrated resilience with 3% YoY volume growth and 6% value growth, led by strong performance in mustard oil and improved traction in palm oil, though sunflower oil sales remained flat amid elevated inflationary pressures. The segment benefited from relatively lower price volatility during the quarter. Food & FMCG business showed gradual recovery with 3% YoY growth (excluding G2G sales), while the Industry Essentials segment faced significant headwinds with 7% YoY volume decline, primarily due to weak sales of castor and de-oiled cake products.
The food & FMCG business showed gradual recovery with 3% YoY growth, supported by improved offtake and strategic interventions in the rice business. While the overall rice business (excluding G2G) declined marginally in low single digits, the branded domestic rice segment grew in strong double digits. Wheat flour consumer packs remained flat amid subdued demand, though wheat flour and refined flour supplied to the HoReCa (hotels, restaurants, cafes) segment posted strong double-digit growth. Food & FMCG products other than rice and wheat, accounting for over one-third of the segment, recorded over 30% YoY growth during the quarter.
Alternate channels, including e-commerce, quick commerce and modern trade, continued to perform strongly, with volumes rising 42% year-on-year. These channels generated around ₹4,800 crore in revenue over the last 12 months, driven by a 65% YoY surge in quick commerce volumes. Online sales of atta and rice grew over 40% YoY, while HoReCa and branded exports of edible oil and food products also recorded strong double-digit volume growth. The company's distribution footprint expanded to close to 9.5 lakh outlets, representing 18% YoY growth. This digital growth trend reflects the broader shift in urban consumption patterns, where organised retail and digital channels are gaining prominence over traditional formats.
The recovery extends beyond traditional FMCG categories, with consumer durables also seeing improvement. Air-conditioners, which suffered weak demand earlier due to a poor summer season, are witnessing inventory correction. With GST on ACs reduced from 28% to 18%, companies have resumed peak production levels. Companies across the sector have recalibrated their pricing strategies by returning to popular price points and increasing pack sizes instead of reducing prices, which has improved retailer acceptance and eased transactions, particularly for small kirana stores. The full impact of GST rationalisation on demand and sales is expected to be visible from the January–March quarter (Q4), as pricing stabilises and revised products are fully integrated into the market.
Shares of AWL Agri Business Ltd ended lower on Monday, January 6, by 1% at ₹233.90 on the NSE, following the mixed quarterly performance announcement. According to reports from Whalesbook News Team, the stock also declined 1% on January 5 to the same level. The stock decline came despite the company's 5% value growth and recovery in key segments offset by challenges in industry essentials. The company's stock has shown -1.05% returns over 1 day and -29.27% returns over 1 year. However, the broader FMCG sector outlook remains positive and bullish, especially heading into early 2026, with stabilised inventories, full-capacity production, and improving consumption trends supporting long-term efficiency and sustainable growth.
