The organised fast-moving consumer goods (FMCG) sector is expected to post 8–10 per cent revenue growth this fiscal as players begin passing on impact of crude-linked inputs including packaging materials, emanating from the West Asia conflict, according to estimates by Crisil Ratings. It noted this will be a tad higher than about 8 percent witnessed in FY26.
While there will be a sharp 6–7 per cent increase in realisations as players partially pass on the increase in prices of crude-linked inputs, the volume growth is likely to moderate to 2–3 per cent this fiscal amidst inflationary pressures.
In FY26, organised FMCG players witnessed 5–6 per cent volume growth.
“Consequently, the earnings before interest, taxes, depreciation and amortisation (Ebitda) margin of our rated FMCG players is seen declining 150–200 basis points (bps) this fiscal from about 19 per cent in fiscal 2026,” it added.
The estimates are based on a study of 74 FMCG companies, accounting for a third of the sector’s estimated ₹6.6 lakh crore revenue in fiscal 2026, indicates as much.
inflationary headwinds
Anuj Sethi, Senior Director, Crisil Rating, said, “Household budgets, both rural and urban, will face inflationary headwinds this fiscal as average crude oil prices for this fiscal are projected at 30–35 per cent, higher on-year. As these price increases are passed on to the retail consumers, including through fuel price hikes, disposable incomes are likely to be hit. Furthermore, the rural market, which had outperformed the urban segment in the past two years, is expected to see a reversal of fortunes this fiscal, given the forecast of a below-normal monsoon. Nevertheless, continuing benefits of the goods and services tax rationalisation undertaken in September 2025, along with increased allocation to welfare schemes, will provide some demand support for the sector.”
Cost pressures are not uniform across segments. Personal Care and Home Care categories such as soaps, detergents, hair oil and shampoos are facing a sharper increase in input prices compared to F&B.
Aditya Jhaver, Director, Crisil Ratings, said: “Gross margins of organised FMCG players will decline 300–350 bps due to the rise in input costs, as pass-through of cost inflation will be partial amid competitive pressures and the risk of downtrading. In the milieu, companies are calibrating their advertising spends, focusing on cost efficiencies and negotiating with suppliers and distributors across the value chain. This is expected to limit the impact on operating profitability to 150–200 basis points, keeping operating margins relatively healthy at 17– 18 per cent.”
Published on May 21, 2026