FMCG growth steady for now, price hikes may help but demand and costs remain a worry: Abneesh Roy

Abneesh Roy, Executive Director, Nuvama Institutional Equities, said consumer companies reported steady fourth-quarter updates, with growth supported by pricing trends and store expansion in retail.He said most companies delivered in line or ahead of expectations. “We have seen good updates from most of the players,” he said, highlighting performance across companies like Marico, Dabur and retail players.

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Roy noted that pricing is expected to return across segments. “We expect 3-4% price growth,” he said, adding that this could support revenue if raw material pressures ease. However, he flagged that input costs remain elevated, which could affect margins.

He pointed out that companies with exposure to certain regions may face near-term challenges. Dabur and Emami could see pressure in international business due to disruptions in West Asia, while most other FMCG firms have limited exposure.On demand, Roy said the impact of price hikes remains manageable for now but needs monitoring. “Some level of demand destruction can happen,” he said, especially as companies reduce promotions in categories like soaps, detergents and edible oils.

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He added that companies with favourable input trends may be better placed. He likes Marico, Tata Consumer, Nestle and Britannia are safer bets, he said, citing lower raw material costs in key inputs.

Comparing segments, Roy said retail companies may perform better in the near term due to store expansion and pricing-led growth. He added that if inflation persists, demand trends across segments will need closer tracking.

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