Dabur, HUL, Nestle rise up to 5% as NIFTY FMCG outshines NIFTY50; check what analysts expect in Q1 FY27

FMCG stocks were seen trading higher on Wednesday, July 1, with shares of Dabur, Nestle India, Colgate and Hindustan Unilever (HUL) leading the rally.

At the time of writing, all stocks in the NIFTY FMCG index were trading in the green. The index rose over 2% to hit an intraday high of 49,819.35, outperforming the benchmark NIFTY50, which advanced 0.77% to its day’s high.

Data showed that the NIFTY FMCG index has gained 8% in the last three months, while the NIFTY50 has risen 6% over the same period.

The sectoral index has delivered investors 3% returns in the past one month and 1.3% gains in a week on NSE. Meanwhile, the NIFTY50 index has risen 2.7% in the last one month while it has slipped 0.1% in the past one week.

Dabur was the most contributing stock, rising 4.6%, followed by Godrej Consumer Products (3.37%), Colgate Palmolive (3.25%), Nestle India (3.17%) and Emami (3.03%). Hindustan Unilever (2.28%), Varun Beverages (2.04%), Britannia (1.88%) and Marico (1.69%) were the other top gainers.

Furthermore, Tata Consumer Products (1.44%), United Breweries (1.35%), ITC (1.29%), United Spirits (0.31%), Radico Khaitan (0.06%) and Patanjali Foods (0.04%) were also seen higher.

What companies said

HUL Chairman Nitin Paranjpe said this week that the diversified FMCG major expects input cost pressures to gradually ease as crude oil prices have retreated from recent highs, though it may take some time before costs return to normal levels.

At the company’s Annual General Meeting (AGM), Paranjpe had further said that the quarter that has gone by had a significant impact in terms of commodity costs because crude prices, which impact a large part of HUL's portfolio, rose significantly, crossing $100 per barrel at one point in time. “They have come back, and hopefully we should see things easing out a little going forward,” said Paranjpe while replying to shareholders.

However, he cautioned that the impact of higher input costs would not disappear immediately. “Commodity cost inflation this quarter has been significant and will take a while for it to come back to normalcy,” Paranjpe said. He said HUL would continue to focus on cost efficiencies and productivity measures to protect profitability while minimising the burden on consumers.

Meanwhile, ITC, in its annual report for FY26 had outlined an aggressive medium-term growth strategy centred on expanding its FMCG business, scaling digital agriculture, growing its fresh food and sustainable packaging businesses, while targeting net zero operations by 2050.

The diversified conglomerate had also said that the rural consumption is likely to remain robust, aided by resilient rural wages and declining unemployment levels, while urban demand is expected to improve on the back of measures aimed at increasing disposable incomes and consumption, along with a recovery in consumer credit.

In FY26, ITC's FMCG businesses recorded a segment revenue of ₹24,209.75 crore, representing growth of 10.1% over the previous year.

Here’s what analysts expect in Q1 FY27

Analysts at Goldman Sachs expect home and personal care (HPC) companies to witness strong revenue acceleration in Q1, driving overall growth in the FMCG sector. In a note on Wednesday, they said that the input cost inflation is likely to have a modest impact on EBITDA margins for HPC players, while companies such as Tata Consumer, Nestle, and Marico are expected to lead EBITDA growth during the quarter.

However, the analysts flagged a mixed outlook for some segments, with ITC likely to see a sharp decline in profit due to the peak impact of cigarette tax hikes. They also expect United Spirits to deliver relatively weak results for the quarter.

“Domestic demand conditions have become more nuanced in Q1 2026-27, with below-normal monsoon expectations posing downside risks to demand across rural-linked segments such as fast-moving consumer goods (FMCG), two-wheelers, tractors, and agrochemicals,” said Kinjal Shah, Senior Vice President & Co-Group Head-Corporate Ratings, ICRA.

The ratings agency said that the depreciation of the rupee supported the domestic paper industry by reducing the threat of imports, which had weighed on realisations over the past few years. In contrast, import-dependent sectors, including FMCG, faced margin pressure due to elevated input and fuel costs, with limited ability to fully pass on these increases.