Growth in sales of fast-moving consumer goods (FMCG) companies slowed down in the quarter ended September 2025. Several large companies in this industry had warned of a slowdown. They have also reposed faith in the second half of the current fiscal year turning around.
Financial statements of 60 listed FMCG companies were available as of November 10. These account for 36 percent of the 166 listed FMCG companies that release their quarterly performance data every quarter. But they account for a much higher about 80 percent share of the total sales of all listed FMCG companies. This is therefore a useful sample to understand the broad trends in the performance of the FMCG companies.
Net sales grew by 8.1 percent, year-on-year (y-o-y) in the quarter ended September 2025. This is a sharp fall from the 12.6 percent increase registered in the preceding, June 2025 quarter.
The growth in net sales of FMCG companies had fallen rather sharply two years ago, in 2023-24 to 2.5 percent after having grown by 22 and 14 percent in the preceding two years. The recovery in the growth rate began in the March 2024 quarter and the y-o-y growth rate steadily improved to 12.6 percent in the June 2025 quarter. In the backdrop of this steadily improving growth in net sales, the fall to 8.1 percent is significant.
This slowdown reflects, to a great extent, the poor performance of some of the leaders in the industry. The largest, ITC, saw its net sales fall by 3.4 percent y-o-y. Four of the top 15 FMCG companies that have released their financials for the September 2025 quarter reported a shrinking of sales. Besides ITC, these were Varun Beverages, United Breweries and Colgate-Palmolive (India). 16 of the 60 FMCG companies that released their financial statements for the September quarter revealed a y-o-y fall in net sales.
The recovery in aggregate net sales before its fall in the September 2025 was in nominal terms. Such a recovery is not evident in real sales, i.e. sales adjusted for inflation, which is a proxy for volumes growth.
Real sales growth has been on a declining gradient since June 2022. This growth fell from 7.2 percent in the June 2023 quarter to 5.2 percent in the quarter of June 2025. In the quarter ended September 2025, real growth in sales of FMCG companies fell to 2.5 percent. This is the lowest growth in over four years since the quarter of December 2020.
This declining trend in real sales growth truly reflects the agony of the FMCG industry. The growth that they have been seeing in recent times is mostly driven by inflation and not by volumes. As inflation fell dramatically in the recent times, the growth momentum all but collapsed.
It is perhaps, therefore, not surprising that advertising expenses of FMCG companies have either declined or almost stagnated y-o-y for each of the past five quarters.
Adjusted for inflation, even Hindustan Unilever which reported a negligible growth of 0.5 percent would report a fall in real sales. Others such as Procter & Gamble, Britannia, Gillette and Godrej Consumer wouldn’t be too far with nominal y-o-y sales growth of less than 4 percent.
Growth in profits of FMCG companies partly mirrors the nominal increase in net sales. These companies reported a y-o-y 5.7 percent increase in net profit in the quarter ended September 2025. Growth in profit after tax (PAT) has been volatile in recent quarters because of the impact of some prior period and extraordinary (P&E) transactions. PAT net of P&E gives a clearer picture of the trends. In the four quarters of 2024-25, growth in PAT net of P&E has ranged between 6 and 8 percent. Then, it shot up to 10.7 percent before falling to a recent low of 5.7 percent.
Five of the top 15 FMCG companies that have released their September 2025 results reported a fall in PAT compared to a year ago. These are Hindustan Unilever (-4.6 percent), Godrej Consumers (-9.3 percent), Colgate Palmolive (-17.1 percent), AWL Agro Business (Adani Wilmar) (-30 percent) and United Breweries (-64.5 percent). ITC, the largest FMCG company, recorded a fall in sales but its PAT grew by 2.3 percent.
FMCG companies seem to have regained their profitability in the quarter ended September 2025 even as sales and profit growth slowed down. PAT net of P&E as a percent of net sales and other income rose to 12.4 percent in the September 2025 quarter from 11.6 percent in the June quarter and 11 percent in the March 2025 quarter. At 12.4 percent, the profit margin is the highest in two years.
This level of profit margin also compares well with the FMCG companies’ past performance. The 12.4 percent margin level of the September 2025 quarter was exceeded only in 2019-20 (13.1 percent) and 2020-21 and 2023-24 (12.6 percent). Compared to historical levels, therefore, the profit margin of FMCG companies in the September 2024 quarter was above average. The challenge is in growing the top line. The refrain from accelerating their spending on advertising seems to suggest some inhibition.
FMCG cos: Sales growth slows, margins rise
Growth in sales of fast-moving consumer goods (FMCG) companies slowed down in the quarter ended September 2025. Several large companies in this industry had warned of a slowdown. They have also reposed faith in the second half of the current fiscal year turning around.
Financial statements of 60 listed FMCG companies were available as of November 10. These account for 36 percent of the 166 listed FMCG companies that release their quarterly performance data every quarter. But they account for a much higher about 80 percent share of the total sales of all listed FMCG companies. This is therefore a useful sample to understand the broad trends in the performance of the FMCG companies.
Net sales grew by 8.1 percent, year-on-year (y-o-y) in the quarter ended September 2025. This is a sharp fall from the 12.6 percent increase registered in the preceding, June 2025 quarter.
The growth in net sales of FMCG companies had fallen rather sharply two years ago, in 2023-24 to 2.5 percent after having grown by 22 and 14 percent in the preceding two years. The recovery in the growth rate began in the March 2024 quarter and the y-o-y growth rate steadily improved to 12.6 percent in the June 2025 quarter. In the backdrop of this steadily improving growth in net sales, the fall to 8.1 percent is significant.
This slowdown reflects, to a great extent, the poor performance of some of the leaders in the industry. The largest, ITC, saw its net sales fall by 3.4 percent y-o-y. Four of the top 15 FMCG companies that have released their financials for the September 2025 quarter reported a shrinking of sales. Besides ITC, these were Varun Beverages, United Breweries and Colgate-Palmolive (India). 16 of the 60 FMCG companies that released their financial statements for the September quarter revealed a y-o-y fall in net sales.
The recovery in aggregate net sales before its fall in the September 2025 was in nominal terms. Such a recovery is not evident in real sales, i.e. sales adjusted for inflation, which is a proxy for volumes growth.
Real sales growth has been on a declining gradient since June 2022. This growth fell from 7.2 percent in the June 2023 quarter to 5.2 percent in the quarter of June 2025. In the quarter ended September 2025, real growth in sales of FMCG companies fell to 2.5 percent. This is the lowest growth in over four years since the quarter of December 2020.
This declining trend in real sales growth truly reflects the agony of the FMCG industry. The growth that they have been seeing in recent times is mostly driven by inflation and not by volumes. As inflation fell dramatically in the recent times, the growth momentum all but collapsed.
It is perhaps, therefore, not surprising that advertising expenses of FMCG companies have either declined or almost stagnated y-o-y for each of the past five quarters.
Adjusted for inflation, even Hindustan Unilever which reported a negligible growth of 0.5 percent would report a fall in real sales. Others such as Procter & Gamble, Britannia, Gillette and Godrej Consumer wouldn’t be too far with nominal y-o-y sales growth of less than 4 percent.
Growth in profits of FMCG companies partly mirrors the nominal increase in net sales. These companies reported a y-o-y 5.7 percent increase in net profit in the quarter ended September 2025. Growth in profit after tax (PAT) has been volatile in recent quarters because of the impact of some prior period and extraordinary (P&E) transactions. PAT net of P&E gives a clearer picture of the trends. In the four quarters of 2024-25, growth in PAT net of P&E has ranged between 6 and 8 percent. Then, it shot up to 10.7 percent before falling to a recent low of 5.7 percent.
Five of the top 15 FMCG companies that have released their September 2025 results reported a fall in PAT compared to a year ago. These are Hindustan Unilever (-4.6 percent), Godrej Consumers (-9.3 percent), Colgate Palmolive (-17.1 percent), AWL Agro Business (Adani Wilmar) (-30 percent) and United Breweries (-64.5 percent). ITC, the largest FMCG company, recorded a fall in sales but its PAT grew by 2.3 percent.
FMCG companies seem to have regained their profitability in the quarter ended September 2025 even as sales and profit growth slowed down. PAT net of P&E as a percent of net sales and other income rose to 12.4 percent in the September 2025 quarter from 11.6 percent in the June quarter and 11 percent in the March 2025 quarter. At 12.4 percent, the profit margin is the highest in two years.
This level of profit margin also compares well with the FMCG companies’ past performance. The 12.4 percent margin level of the September 2025 quarter was exceeded only in 2019-20 (13.1 percent) and 2020-21 and 2023-24 (12.6 percent). Compared to historical levels, therefore, the profit margin of FMCG companies in the September 2024 quarter was above average. The challenge is in growing the top line. The refrain from accelerating their spending on advertising seems to suggest some inhibition.
