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HDFC Securities expects ~12% FMCG revenue growth in Q2, but raw material inflation squeezes margins
HDFC Securities forecasts ~12% YoY revenue growth across its FMCG coverage in Q2, with most companies posting double-digit topline growth. Raw material inflation should hit margins. ITC, Bikaji and Gopal Snacks may report earnings declines; HUL, Dabur and Emami may see single-digit growth.
The numbers
Figures from NDTV Profit,
| Target price roll-forward: | Jun-27 to Sep-27 |
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Why it matters to operators and investors
Expect FMCG suppliers to lean on price hikes, pack-size changes or tighter trade terms as raw material inflation eats into their margins, so check your snacks and staples assortment and margin assumptions before festive-quarter negotiations, especially for Bikaji- and Gopal-type snack lines.
What to watch next
- Q2 results showing sector revenue growth near or away from the ~12% estimate
- Reported earnings declines at ITC, Bikaji and Gopal Snacks versus the preview
- Gross margin and cost-inflation commentary on management earnings calls
- Announcements of price hikes or pack-size changes by large FMCG players
- Estimate or target-price revisions from brokers after results
Likely next moves
Our read of what comes next — analysis, not reported by the source.
- ITC, Bikaji and Gopal Snacks are likely to blame raw material costs for weaker earnings and point to pricing or cost actions as the recovery path.
- HUL, Dabur and Emami may report single-digit growth and attribute the lag to their category mix, with management guiding cautiously on margins.
- FMCG companies broadly are likely to lean on selective price increases or pack and mix changes to protect margins.
- HDFC Securities is likely to adjust estimates and ratings for the names that miss, after rolling target prices forward to September 2027 from June 2027.
- Investors may favour double-digit growers with pricing power and mark down those with declining earnings.