Nifty 50 companies are expected to post a nearly 23% year-on-year rise in net profit in the September quarter of FY27, according to major domestic brokerage estimates. This would mark the strongest earnings growth for India's blue-chip companies in four quarters, even as analysts expect momentum to moderate in the second half of the fiscal year amid rising cost pressures. Metals, banks and consumer-facing companies are expected to lead the earnings season, supported by rising global commodity prices and resilient domestic demand. However, a low base effect from last year's sluggish September quarter is also likely to amplify the growth figures, as noted by Nuvama Institutional Equities.
Sugar prices have surged around 35-40% in recent months, adding significant cost pressure to FMCG companies beyond the earlier reported increases. According to Equirus Securities' October commodity assessment, sugar inflation is estimated at 18-20% year-on-year, creating additional burden for companies across biscuits, confectionery, bakery products and carbonated beverages. Sugar accounts for 10-16% of input costs in these segments, making the price surge particularly impactful. The sharp rise in sugar prices has acted as an additional cost burden amid spike in input cost inflation due to West Asia tensions, as noted by experts. Nielsen data shows the sector's volume down 4% and value down 2% in the April-June quarter, indicating potential volume pressure ahead.
Nestle India is expected to lead with 21% revenue growth, 30% EBITDA growth and 37% PAT growth, on ₹6,809 crore of revenue. Marico is projected to see 31% PAT growth as easing copra prices lift gross margin by about 290 bps YoY. Colgate-Palmolive's PAT is estimated up 21%, while Honasa Consumer's EBITDA is seen up 72% and PAT up 68% on a low base. At the other end, ITC is expected to report 7% revenue growth but EBITDA down 24% and adjusted PAT down 24%, with cigarette business facing excise surge cutting net sales and volumes by about 8%. Bikaji Foods is expected to see revenue up 11% but EBITDA down 16% due to festive season shift. Britannia is seen with 12% revenue growth and 10% PAT growth despite gross margin pressure from higher sugar and palmolein prices, though it may face maximum margin pressure due to heavy exposure to sweet-snacking portfolios.
Despite cost pressures, analysts do not expect higher sugar prices to trigger a broad-based slowdown in demand ahead of the festive season. Sunny Agrawal from SBI Securities favours Nestle India given its strong position in impulse gifting and confectionery segments, which could see demand traction during the upcoming festive season. Ronak Shah from Equirus Securities prefers Marico within the FMCG space, citing its reducing commodity exposure and healthy volume growth in recent quarters. Sandeep Abhange from LKP Securities expects strong volume growth in Q2FY27, noting that larger FMCG companies have already taken mid to high-single-digit price hikes, which should cushion margins without denting festive volumes. Underlying demand has improved with value growth reaching a six-quarter high, led by rural markets, though the key test remains margins as sugar, palm oil and packaging costs remain elevated.
