Fast moving consumer goods (FMCG) stocks are experiencing a significant recovery after months of underperformance, with the Nifty FMCG index rising 7% over the past month. According to reports from The Economic Times, most frontline names including Bajaj Consumer Care Ltd (-3%), CCL Products (India) Ltd (-1%), Marico Ltd (-1%), Nestlé India Ltd (-1%) and Tata Consumer Products Ltd (-8%) are now within striking distance of their lifetime highs, leaving room for potential catch-up if demand improvement sustains.
In 2026 so far, performance across FMCG stocks has been sharply divergent with Bajaj Consumer Care (113%), CCL Products (India) Ltd (19%), Nestle (15%), and Marico (11%) seeing strong gains, while larger staples such as *ITC (-24%), Godrej Consumer Products (-15%), Emami (-14%), Hindustan Unilever Ltd (-1%), Britannia Industries Ltd (-8.5%), Dabur India Ltd (-3%) and Tata Consumer Products Ltd (-1%) have lagged. As reported by The Economic Times, stronger sales growth driven by company-specific initiatives, GST benefits and coffee inflation have supported Nestle, Bajaj Consumer and CCL Products, while other companies are yet to see meaningful improvement in sales trends.
Recent management commentary across companies points to early signs of improving consumption trends, with Marico Ltd management expecting double-digit revenue growth in FY27, driven by high single-digit volume growth in the domestic business, while the international business is projected to grow in the mid-teens on a constant currency basis. According to a Nuvama Institutional Equities report dated 7 May, Dabur India Ltd has raised its FY27 revenue growth guidance from high single-digit growth to low double-digit growth, driven by recovery in volumes, demand acceleration following GST cuts, price hikes of around 4% already taken, and premiumization across the home and personal care and beverages segments.
Tata Consumer Products shares jumped nearly 7% on Monday after reporting strong Q4 FY26 results that beat estimates. The company's consolidated net profit rose 21% YoY to ₹419 crore in Q4 FY26, from ₹345 crore in the same quarter of the previous financial year, while revenue from operations rose 18% year-on-year to ₹5,438 crore. The company announced a dividend of ₹10 per share for FY25-26, to be paid to eligible shareholders on or after June 15, 2026. Motilal Oswal expects the India foods segment to continue delivering strong growth led by Tata Sampann, expansion in salt portfolio, and premium offerings, while international business profitability is likely to improve with normalization of coffee costs.
Despite the recovery momentum, rising input costs remain a key risk for the sector, forcing companies to balance price hikes with volume growth while protecting margins. As reported by The Economic Times, Dabur has announced price hikes of around 4% to counter raw material inflation, while Nuvama Institutional Equities noted that input cost inflation of 8-10% versus calibrated price hikes of 2-5% could keep near-term margins under pressure for Hindustan Unilever Ltd. However, valuations present attractive opportunities with stocks such as CCL Products currently trading at 38.67 times earnings, below their 10-year average multiple of 47.98 times, and Dabur trading at 45.64 times versus its long-term average of 63.94 times.
