The rally comes on the back of robust results and early signs of recovery, particularly in rural demand. Companies are also benefiting from price adjustments implemented after GST-led corrections, especially in the mass segment, which is now starting to reflect in earnings.
Recent earnings from VST Industries highlighted this trend, with strong performance driven by pre-buying ahead of tax hikes and price increases.
The company reported cigarette volume growth of 8.6%, while revenue surged 30%, despite factoring in additional depreciation of ₹48 crore.
Similarly, Bajaj Consumer Care Ltd delivered a strong performance, with its stock already up 80% so far in 2026.
Q4 business updates from other FMCG players also point to a steady recovery.
Godrej Consumer Products is expected to post double-digit revenue growth with high single-digit volume expansion. Marico has guided for consolidated revenue growth in the low twenties, supported by similar volume trends, while Dabur India expects high single-digit growth in its domestic business.
Brokerages believe this is the first quarter where the full benefit of earlier price corrections is visible, with the price-volume gap beginning to normalise.
Rural demand has also strengthened, providing an additional tailwind for the sector.
Looking ahead, analysts expect further calibrated price hikes of around 3-4% across FMCG categories in Q1FY27, while sectors such as paints and edible oils could see sharper increases of 6-10% or more.
Going forward, commentary on inflation trends and margin outlook will remain key monitorables, along with the sustainability of volume growth after recent price hikes.
