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FMCG Stocks Face Q2 Earnings Test as Valuations Sit 25% Below Five-Year Average; ITC Sales Seen Down 20%

Our read

ITC will more likely than not report a steep September-quarter fall in sales and margin, largely priced in by the Nifty FMCG Index's 31.1x multiple.

For operators

With all-India FMCG volume growth at minus 4% in the June 2026 quarter against 6% a year earlier, and ITC's margin expected to drop to 24.5% from 34.3%, plan for volume defence through pricing, pack and trade-spend choices rather than assuming margins hold.

Watch

ITC EBITDA margin above the 24.5% expected in the September-quarter results would mean the profit hit is milder than feared, easing pressure on suppliers.

The report,

All-India FMCG volume growth fell to minus 4% in the June 2026 quarter from 6% a year earlier, per Nielsen data. Analysts forecast ITC's September-quarter net sales down 20%, while the Nifty FMCG Index trades at 31.1 times earnings.

Nifty FMCG Index earnings multiple against its five-year average
Five-year average multiple41.5x
Nifty FMCG Index multiple now31.1x

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Reported figures

From the report. Source details below

ITC September-quarter volume forecast: 8% fall
ITC September-quarter EBITDA forecast: 24% drop
ITC projected margin: 24.5% from 34.3%
Nifty FMCG five-year average multiple: 41.5

What to watch next

  • ITC net sales decline versus the 20% fall analysts expect
  • Nielsen FMCG volume growth for the September quarter versus minus 4% in June
  • Nifty FMCG Index multiple versus 31.1x after the results
  • ITC management commentary on demand and volume recovery

Likely next moves

Our read of what comes next — analysis, not reported by the source.

  • ITC is likely to attribute the sales and margin decline to weak consumer volumes when it reports September-quarter results.
  • Analysts are likely to trim FY estimates for ITC and other FMCG names if the margin lands near 24.5%.
  • Rival FMCG companies may keep promotions and pack-price actions going to defend volumes while industry growth is negative.
  • Distributors and retailers are likely to stay cautious on inventory until Nielsen volume data turns positive again.
  • Investors may treat the 31.1x multiple as a floor only if the results show earnings stabilising, not just cheaper prices.

The source

Source Read the source at NDTV Profit Published

First seen

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