Mumbai (Maharashtra) [India], June 8 (ANI): Demand in India's fast-moving consumer goods (FMCG) sector continues to remain resilient despite rising input cost pressures linked to the ongoing West Asia conflict, with several companies undertaking price hikes to protect margins, according to a report by Anand Rathi.

The report noted that the FMCG sector delivered a healthy revenue performance during the fourth quarter of FY26, supported by improving demand trends, selective pricing actions and continued premiumisation across product categories.

According to the report, the sector recorded revenue growth of 11 per cent in Q4FY26 compared with 8 per cent growth in FY26.

While growth varied across companies due to category-specific challenges and weather-related disruptions, most FMCG players reported positive top-line expansion.

'Demand seen holding up, despite input inflation headwinds,' the report stated.

The report attributed this growth to a combination of volume recovery, aided by GST-cut tailwinds, expansion of distribution networks and product innovation initiatives.

Despite healthy demand conditions, the report also added that the sector is facing renewed pressure from rising commodity prices.

The report said selective commodity inflation re-emerged during the quarter due to the ongoing conflict in West Asia, leading several FMCG companies to undertake pricing actions ranging between 3 per cent and 10 per cent in an effort to safeguard profitability.

Anand Rathi also highlighted weather-related risks as an important factor to watch in the near term.

According to the report, El Nino conditions are expected to develop during the monsoon season, while the India Meteorological Department (IMD) has forecast a below-normal monsoon in 2026, with rainfall expected to be 10 per cent lower than the Long Period Average (LPA).

The report cautioned that weaker rainfall could potentially affect rural incomes and demand, which remain important drivers for FMCG consumption.

At the same time, the report noted that the normalisation of volumes following GST-related adjustments has helped support growth momentum in recent quarters.

It said that while the second quarter had witnessed disruptions due to GST-related inventory and pricing realignments, the situation improved in the third quarter and fully normalised in the fourth quarter.

According to Anand Rathi, while input cost inflation and monsoon-related uncertainties remain key near-term concerns, demand trends in the FMCG sector continue to hold up, supported by volume recovery, premiumisation and selective pricing actions undertaken by companies. (ANI)