FMCG companies are in the midst of a sector-wide slowdown. However, the staples, amongst them, may face the brunt of the weak demand trend.
A report by HSBC Global Research states that the consumer staple segment is expected to see just 5 percent revenue growth in the first quarter of the fiscal year 2026.
The report points out that while weak underlying demand in the consumer staples segment persists, increased competition is further adding fuel to the revenue growth in the sector.
Furthermore, while there is expected to be a gradual recovery in the staples segment, because of the low base (already lower revenue in the previous quarter), the actual revenue growth in the sector will remain underwhelming.
Non-essential segment to help
Consumer discretionary, or the non-essential segment of consumer companies, is expected to show good growth of 21 percent in the quarter. The HSBC Global Research report says that the growth in the segment will be led by a combination of new store additions and increased sales in the existing stores.
On the back of high gold prices, the jewellery industry’s growth will add to the overall growth of the discretionary segment. Some companies like Jubilant Foodworks and Page Industries are expected to outperform their respective peers due to factors such as new product launches.
Further, in the clothes retail subsection, Trent and Vishal are adding to the discretionary segments’ growth due to their store additions. The report says that these two companies could see a growth of 34 percent, Trent, and 18 percent, Vishal Mega Mart, in their revenue.
Watch out for these 3 companies
The report highlights that Marico is expected to see an 18 percent YoY growth in its revenue in Q1FY26. Marico’s revenue growth is supported by the strong price hike in its Parachute Coconut and Saffola Edible oils portfolio. Additionally, the company’s Marico Foods could also see strong growth in the quarter.
Godrej Consumer is expected to see a moderate 5 percent YoY growth in its revenue in Q1, says the report. The company’s home care segment is expected to grow at 7 percent and the personal care segment is expected to grow at 4 percent.
ITC is also expected to see a 5 percent growth in its revenue in the quarter as per the HSBC Global Research report. While the company’s consumer goods segment is expected to grow between 5 to 9 percent its cigarette business is expected to grow not more than 5 percent.