NIFTY FMCG index surges nearly 4% in two sessions; here is why FMCG shares are surging

The measure of fast-moving consumer goods (FMCG) companies on the National Stock Exchange (NSE) has surged as much as 3.67% or 1,820 points in the last two trading sessions. FMCG shares came under buying interest on expectations of strong March quarter earnings after Nestle India surprised market participants by posting best quarterly earnings performance in nearly a decade.

Nestle's rub off effect

Nestle India earned a net profit of ₹1,114 crore in the fourth quarter of financial year 2025-25 (Q4FY26), marking an upside of 26% from ₹885 crore in the year-ago period. For financial year 2025-26, Nestle India's net profit rose 7% to ₹3,545 crore.

The company's revenue from operations advanced 23% to ₹6,748 crore in Q4 compared with ₹5,504 crore in the same period last year.

The FMCG giant reported a strong operational performance as its operating profit also known as EBITDA (earnings before interest, taxes, depreciation and amortization) jumped 28% to ₹1,772 crore and EBITDA margin improved by 100 basis points to 26.2% from 25.2% in the year-ago period.

The company's board announced a final dividend of ₹5 per share.

“I am pleased to share that this quarter, Nestlé India delivered high double-digit growth and recorded its highest-ever domestic sales, at INR 6,445 crore. This performance was powered by double-digit volume growth, driven by over 50% increase in advertising spends, whilst delivering a healthy EBITDA margin of 26.3%," said Manish Tiwary, Chairman and Managing Director of Nestle India.

"Total sales and domestic sales for the quarter increased by 23.4% and 23.1%, respectively. Encouragingly, all product groups contributed to this performance," he added.

Last week, Bajaj Consumer Care, which makes almond oil and coconut oil, said that its net profit more than doubled to ₹64 crore in March quarter from ₹31 crore in the same period last year.

its revenue from operations jumped 27% to ₹308 crore and the company reported strong operational performance as its EBITDA surged 135% to ₹77 crore and EBITDA margin improved to 25% from 13% in the year-ago period.

The company’s domestic business recorded a strong growth in quarter and the full year.

“On a full year basis, the brand grew in the twenties and the brand recorded a near double digit volume growth in the quarter after accounting for ml-age reductions,” Bajaj Consumer said in an investor presentation.

Steady Q4 business updates

FMCG shares also got a boost from steady business updates posted by FMCG giants in March quarter and they also got a benefit of transition to reduction in goods and services tax (GST) rates which got implemented in the third week of September.

Earlier this month, Dabur said that witnessed steady momentum in the domestic India business, underpinned by a stable macroeconomic environment.

"This strong domestic performance helped offset challenges in our key international markets particularly Middle East, where heightened geopolitical tensions led to demand disruptions and supply chain constraints," Dabur said.

"Going forward, we anticipate a progressive recovery in domestic demand, driven by improving consumption trends. We remain watchful of the evolving geopolitical landscape and will continue to take proactive measures to mitigate any potential impact on our operations and cost structure," Dabur had said in its quarterly business update.

Godrej Consumer Products earlier this month said that demand conditions and consumer sentiment remained steady in the domestic FMCG sector through Q4 FY26, with trade channels normalising following the GST transition and food inflation easing. Policy tailwinds, including personal income tax relief and GST rationalization do position the industry well to offset the impact of crude led inflation as we enter FY27.

"Against this backdrop, our Standalone business is expected to deliver double-digit underlying sales growth and high-single digit underlying volume growth in Q4 FY26, in line with guidance provided at our last analyst interaction. Excluding soaps, volume growth continues in double-digits, positioning GCPL among the volume growth leaders in the Indian FMCG sector. Growth has been broad-based, with all our future categories growing well. Standalone EBITDA margins are expected to sustain within our normative range, supported by meaningful cost savings in Q4," Godrej Consumer Products said.

As of 12:04 pm, NIFTY FMCG index was outperforming in an otherwise weak session by rising 1% while NIFTY50 index declined 0.6%. All but two shares in the measure were trading higher led by the Emami's 4.6% gain. Tata Consumer Products, Hindustan Unilever, Nestle India, United Spirits, Varun Beverages and Dabur also rose between 1.6% and 3.43%.