Indian FMCG Profit Margins Set to Rise Amid Falling Commodity Prices

The profits of Indian Fast-Moving Consumer Goods (FMCG) companies are expected to improve in the first quarter of FY26, driven largely by a broad reduction in the prices of key agricultural and packaging commodities. This is according to a recent report by Antique Stock Broking Limited.

Several essential input prices have eased, which will likely benefit major FMCG players. During the first quarter of FY26, agricultural commodity prices fell compared to the final quarter of FY25. This trend suggests a moderation in year-on-year inflation, providing relief to manufacturers struggling with elevated input costs for several quarters.

Notably, wheat, a staple raw material for many FMCG products, experienced a 13% price decrease quarter-on-quarter. Barley prices also dropped by 13% QoQ yet remained 10% higher on a year-on-year basis. Palm oil prices saw a significant 16% drop QoQ, following a governmental reduction in import duties. Packaging costs, including High-Density Polyethylene (HDPE), have also softened, while some crude-based inputs saw a manageable 3% increase. In contrast, dairy inputs showed stability, but copra prices diverged from the deflationary trend. Overall, most commodity prices saw a decline, promising substantial cost savings for FMCG firms, allowing them to either protect margins or reduce consumer prices.

(With inputs from agencies.)