Sugar, crude and copra spikes set to squeeze FMCG and paint margins in September quarter
Nomura expects higher sugar, crude, HDPE and copra costs to pressure September-quarter profitability for Indian consumer companies. Britannia and Nestlé India face the sharpest sugar exposure, while Marico, Tata Consumer, Titan and United Spirits are among its preferred picks as margins are expected to improve from Q3.
What happened
Indian FMCG and consumer companies · Nomura expects elevated sugar, crude, HDPE and copra costs to squeeze September-quarter margins for Indian FMCG and paint
Key facts
- Sugar prices: +16% month-on-month in August; +18% year-on-year
- Brent crude: +10% month-on-month
- HDPE: +3% month-on-month; up as much as 42% year-on-year
- Copra: +14% month-on-month; +10% quarter-on-quarter; down 33% year-on-year
- Britannia additional price hike: 2% in September quarter
- HUL price hike: 5% in June quarter
- Godrej Consumer price hike: 5% in June quarter
- Paint companies' price hikes: 12% in June quarter
- Robusta coffee: -4% month-on-month; -8% year-on-year
- Tea: -7% month-on-month; +13% year-on-year
- Gold: -8% from peak; -2% quarter-on-quarter
Why this matters
Prioritize portfolio and partnership opportunities in premium, low-commodity-intensity categories and supply-chain assets that reduce exposure to volatile agricultural and crude-derived inputs.