Nuvama Institutional Equities has released its Q2FY26 consumer-sector preview, identifying a handful of companies it regards as better placed in a quarter marked by the GST transition, raw-material swings and weather disruptions. The brokerage expects its coverage universe to post modest growth revenue up about 5% year-on-year, volumes up roughly 2% and EBITDA broadly flat but stresses that most firms are dealing with a temporary drag from destocking and blocked input-tax credits.
Nuvama’s Top consumer picks: staples
According to the report, Bikaji Foods is one of the clearest beneficiaries of the recent GST changes. Nearly its entire portfolio has shifted to the 5% slab, and Nuvama models double-digit revenue growth and margin expansion even excluding production-linked incentive gains. The brokerage acknowledges palm-oil costs as the main risk but maintains Bikaji in its top-tier group.
Nuvama on Britannia
Britannia remained a structural pick, although the firm notes that lower SGST rates slow the pace of incentive accruals from its Ranjangaon mega plant. Nuvama estimates revenue growth of around 5% in Q2FY26 with slight volume improvement, supported by grammage additions. Operating profit is expected to expand, but other operating income will be weaker due to reduced SGST refunds.
Nuvama on Nestle India
Nestle India is projected to deliver low single-digit revenue growth and modest volume gains, with EBITDA flat year-on-year. While much of its portfolio now benefits from the 5% GST rate, high coffee prices are expected to put pressure on gross margins.
Hindustan Unilever (HUL)
HUL faces near-term headwinds. Roughly 40% of its portfolio has moved to the lower GST slab, prompting price adjustments and destocking. Nuvama modelled flat revenue and volumes in Q2FY26 and an EBITDA decline of around 5% year-on-year, citing both GST disruption and rising palm-derivative costs.
Tata Consumer
Tata Consumer was also highlighted in the preferred list, with growth in beverages and staples and an expected boost from winter demand. The brokerage notes that about 60% of its India business is positively exposed to the GST shift.
Discretionary picks
On the discretionary side, United Spirits has been identified as a key recommendation, benefiting from resilient demand and premiumisation trends even as regulatory environments vary across states.
Asian Paints
Asian Paints was also named despite a soft Q2 outlook due to extended monsoon rains. Nuvama treats the weakness as deferred rather than permanent, pointing to structural leadership in the category and margin support from softer raw-material inputs such as VAM.
The brokerage cited that these picks come against a backdrop of sector-wide adjustment. Companies are grappling with blocked service-related ITC under the new GST structure, slower accruals of state-level SGST incentives and volatility in palm oil, PFAD, coffee and copra. Weather effects including a poor July–August for summer categories and the possibility of a stronger winter if La Niña develops are further shaping the near-term demand picture.