FMCG sector shows signs of recovery in Q3: Here's why
What's the story
The Fast-Moving Consumer Goods (FMCG) sector is witnessing a strong recovery in the December quarter, driven by GST reforms, robust festive demand, and declining raw material prices. Major listed firms have reported this trend in their recent updates. After the initial disruptions caused by GST, where distributors and retailers focused on clearing high-priced inventory, FMCG companies are now seeing signs of recovery.
Demand trends
Rural demand outpaces urban consumption in Q3
Post-trade stabilization, consumer sentiment has improved in both urban and rural areas. However, rural demand has continued to outpace urban consumption this quarter as well. This trend was highlighted by FMCG companies such as Dabur, Marico, and Godrej Consumer Products Ltd (GCPL). The sector, which was previously witnessing slow consumption, now expects a sustained recovery in demand and an improvement in revenue trajectory over the coming quarters.
Market performance
Organized trade and e-commerce witness strong growth
Organized trade has continued its strong growth momentum, with e-commerce platforms, including hyper-local delivery services, witnessing robust double-digit growth. Dabur expects its home and personal care business to grow in double digits on the back of strong growth in hair oils and oral care categories. The company also expects key brands such as Dabur Amla franchise, Dabur Almond, Dabur Anmol, Dabur Red Toothpaste and Meswak to record healthy volume-led growth during this period.
Retail performance
Retailers report growth in Q3
Retailers such as Trent, Titan, and D-Mart have also reported growth in their updates. Tata group company Trent, which operates brands like Westside and Zudio, reported a 17% growth in standalone revenue to ₹5,220 crore for the third quarter of FY26. Avenue Supermarts Ltd, which owns and operates the retail chain D-Mart, posted an 18.27% jump in its consolidated net profit at ₹855.78 crore for the December quarter of FY26.