Athira Sethu
Kochi, 2nd Oct 2026
The stock prices of FMCG companies saw a decline on Thursday, October 1. The index of NIFTY FMCG, which is composed of the major FMCG companies in India, fell to its 52-week low by 0.7% at 44,202.
Some of the major FMCG companies, such as ITC, Hindustan Unilever, Godrej Consumer Products, Dabur and Tata Consumer Products, saw their shares nearing the level of 52-week low.
One of the factors behind the drop is the concern over the poor consumer demand. This happens since investors are worried that there is insufficient spending on the consumer items. At the same time, the cost of the raw material rises, which can hurt the profit margin of the company.
Another problem is the slow growth of demand in rural areas, which is important for FMCG companies since they derive a significant amount of their sales from the rural market. This happens due to reduced purchasing power and financial pressure on households.
Low Monsoon Adds to the Concerns for FMCG Sector
Low monsoon has also emerged as an issue in regard to the FMCG sector. In the period from June to September, India experienced 87.4% of its long term average rainfall.
As per the data published by India Meteorological Department (IMD), it was the fourth lowest rainfall due to monsoon since the year 2001.
Rainfall in the country amounted to 759.4 mm in comparison to the normal rainfall amounting to 868.6 mm. It implies that rainfall was low by 13% from the normal levels.
A weak monsoon can affect the FMCG sector since the income of rural areas is dependent upon agriculture. Low rainfall affects crop production and hence farm incomes which in turn results in reduced spending on FMCG items.
Increasing Input Costs
Yet another issue with which the FMCG companies face difficulty is the rise in the input cost. There has been a rise in the prices of crude oil, palm oil and other raw materials used by the FMCGs in the international market environment.
Such rise in prices makes it harder for firms to raise the prices of their products as that can lead to lower demand from consumers. Analysts suggested that conventional retail and rural demand are poor while modern trade, e-commerce and premium demand are rising.
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