FMCG Firms Eye Double-Digit Q1 FY27 Sales Growth on Price Hikes, Resilient Demand
JM Financial and IIFL Capital expect the sector to post ~13% YoY sales growth (ex-ITC/VBL), driven by price hikes and steady demand. Marico, Nestle, VBL and Honasa seen leading with ~20% volume growth; ITC (cigarette volumes -10%) and Jyothy Labs likely weak. Raw material index up 31% YoY pressures margins.
What happened
Hindustan Unilever · Brokerages JM Financial and IIFL Capital expect FMCG firms to post double-digit sales growth in Q1 FY27, led by price hikes and resilient
Key facts
- ~13% YoY sales growth (ex-ITC/VBL)
- IIFL aggregate 6.8% sales growth
- 14% ex-ITC
- raw material index +31% YoY
- P/E ~50x
- ITC cigarette volumes -10%
- ITC cigarette net sales -28%
- Honasa ~20% volume growth
- VBL ~20% volume growth
- EBITDA ex-ITC +15.3%
Why this matters
The 31% raw material spike widens the gap between scaled, pricing-powerful players and weaker names, opening a window to acquire underperforming brands or supply capacity at reset valuations.
What to watch
- Q1 FY27 actual results vs ~13% sales / +15.3% EBITDA estimates
- Raw material index trajectory (palm oil, coffee, packaging) sequential moves
- Rural demand recovery indicators and monsoon progress
- ITC cigarette volume decline confirmation (-10%)
- Management commentary on further price hikes vs volume defense
- Rotate toward volume-growth leaders (Marico, Nestle, VBL, Honasa) over pricing-dependent laggards
- Underweight ITC on cigarette volume weakness; monitor for value support
- Watch for gross-margin guidance and pricing runway commentary in management calls
- Track distributor channel-check data for early volume slowdown signals