Fast-moving consumer goods Sector Q3FY26: Premiumisation and Rural Demand Drive Growth

FMCG Q3FY26 Performance Overview

The FMCG sector delivered a healthy performance in Q3FY26, reflecting resilient consumption trends across urban and rural India.

• Revenue Growth: +9% YoY
• Operating Profit Growth: +7% YoY
• Profit After Tax (PAT): +3% YoY
• EBITDA Margin: Expanded to 26.8%
• PAT Margin: Improved to 18.7%

The steady margin expansion indicates effective cost management alongside calibrated price increases.

Key Growth Drivers

1 Premiumisation Across Categories

Premiumisation continues to be the dominant structural growth theme. Branded and higher-value offerings are expanding faster than mass and unbranded segments, particularly in urban markets.

Consumers are increasingly shifting toward aspirational products, with premium portfolios delivering superior growth and profitability.

2 Rural Demand Recovery

A gradual but steady revival in rural demand supported overall volume growth. Broad-based expansion across both urban and rural markets highlights improving consumption sentiment.

3 Calibrated Pricing & GST Relief

Selective price hikes and GST adjustments provided margin support without materially impacting demand elasticity.

4 Modern Trade & E-commerce Expansion

Modern trade and digital channels remain critical growth engines, accelerating premium adoption and deepening urban penetration.

Company Performance Highlights

Leading FMCG players demonstrated robust growth momentum:

• Nestlé reported double-digit revenue growth supported by strong category performance.
• ITC witnessed healthy growth in packaged foods and personal care segments.
• Tata Consumer Products delivered strong top-line expansion with continued portfolio premiumisation.

These performances underscore the strength of premium portfolios and disciplined brand investments.

Structural Consumption Shift in India

India’s consumption story is increasingly being shaped by a structural move toward premium products:

• Faster growth in branded and value-added offerings
• Urban premiumisation delivering superior margins
• Gen Z and millennial consumers driving aspirational demand
• E-commerce accelerating premium penetration

While urban markets are leading premium growth, companies continue investing in rural distribution networks to build long-term volume foundations.

Outlook for FMCG Sector

The combination of premiumisation, rural demand recovery, and expanding modern trade channels positions the FMCG sector for sustained medium-term growth.

Key monitorables going forward include:

• Raw material cost trends
• Rural income momentum
• Competitive intensity in premium categories
• Channel mix shifts toward e-commerce

Overall, Q3FY26 reinforces that India’s FMCG sector remains structurally strong, with premiumisation and consumption recovery emerging as powerful long-term growth drivers.