FMCG Stocks Under Pressure as Nifty Slips Below 25,850; “Volume Recovery Likely in H2 FY26 Post-GST Transition,” says PL Capital’s Amnish Aggarwal

Mumbai, October 24

Indian equity benchmarks extended their decline in Friday’s afternoon trade, weighed down by selling in FMCG majors amid cautious management commentary and foreign fund outflows. At 12:45 p.m., the S&P BSE Sensex fell 176.9 points (0.21%) to 84,379, while the NSE Nifty 50 dropped 57 points (0.22%) to 25,834.

FMCG stocks were among the biggest laggards, led by Hindustan Unilever, Colgate-Palmolive, and Nestlé India, while broader market sentiment remained weak ahead of the festive season.

“Volume recovery is likely in the second half of FY26 as trade stabilises post-GST transition. While near-term volatility persists, underlying consumption drivers remain intact, supported by innovation, premiumisation, and rural recovery,” said Amnish Aggarwal, Director-Research at PL Capital.

Also Read: Upcoming IPO Alert: Brookfield-Backed Solar Giant Avaada Electro Files Confidential DRHP with SEBI to Raise ₹10,000 Crore — Key Details for Investors

Hindustan Unilever (HUL): Margins Hold, Volumes Yet to Pick Up

Shares of Hindustan Unilever Ltd (HUL) declined over 3.5% on Friday after management guided for low single-digit price growth and a focus on volume-led recovery in the second half of FY26.

HUL reported a 3.6% YoY increase in consolidated net profit to ₹2,685 crore for Q2 FY26, versus ₹2,591 crore a year ago. Revenue was modest, as GST 2.0 adjustments and extended monsoon conditions affected trade movement.

CFO Ritesh Tiwari said 40% of HUL’s portfolio was impacted by GST changes, with no further price hikes planned in the near term.

PL Capital View:
According to PL’s report, HUL’s recovery is likely to gather pace from November 2025 as channel restocking stabilises. PL Capital has an ‘Accumulate’ rating with a target price of ₹2,772.

Nestlé India: Packaged Food Demand Resilient, Rural Uptick Visible

Nestlé India shares traded flat post Q2 results that reflected steady growth in core categories such as milk products, prepared dishes, and beverages.
The company reported revenue of ₹6,118 crore (up 5.3% YoY) and net profit of ₹970 crore (up 7.8% YoY).

According to PL Capital Q2FY26 Report, Nestlé continues to outperform peers with consistent double-digit earnings growth and a sharp focus on premiumisation. Input cost moderation and rural recovery are expected to support margins in H2 FY26 retaining a ‘Hold’ rating with a target price of ₹1,222.

Colgate-Palmolive India: GST Impact Temporary, Margins Stay Firm

Colgate-Palmolive (India) stock slipped after Q2 numbers revealed revenue contraction amid GST-led trade adjustments.
Revenue for the quarter declined 6.2% YoY to ₹1,520 crore, while EBITDA margin improved 90 bps YoY to 30.6% due to raw-material savings and better mix.

Toothpaste volumes fell 3%, but premium variants such as Visible White Purple continued to see double-digit growth.
The Q2FY26 report on Colgate PL Capital expects normalisation in trade flows to aid recovery from Q3 FY26. PL Capital maintains a ‘Hold’ rating with a target price of ₹3,152.

Also Read: Crude Oil Prices Surge as US Sanctions Hit Russian Giants; ONGC, Oil India, BPCL, Reliance in Focus

Avenue Supermarts (DMart): Focused on Steady Execution and Expansion

DMart’s Q2FY26 PAT declined 2.2% YoY to ₹692 crore, while revenue grew 17% YoY to ₹13,091 crore, reflecting pressure from promotions and subdued discretionary spending.
The company remains focused on driving operational efficiency and expanding its footprint, with 60 new stores planned for FY26.

According to PL Capital Q2FY26 Report on DMart, festive quarter to mark an inflection point as consumption trends improve. DMart’s strong balance sheet, scale advantages, and focus on cost efficiency position it as a structural compounder in organised retail. The brokerage retains a Hold rating with a target price of ₹4,138, noting that valuations already factor in robust execution

Sector Outlook: FMCG Reset Before the Next Growth Cycle

Despite near-term weakness, PL Capital believes the FMCG sector remains structurally strong.
Rural liquidity improvement, GST stabilisation, and steady demand in packaged foods and home care are expected to drive growth from December onward.

“We see FY26 as a transition year — short-term headwinds from GST changes, but long-term positives from volume growth, premiumisation, and margin tailwinds,” said Amnish Aggarwal.

We expect the FMCG sector to deliver 8–10% earnings CAGR over FY26–28, supported by stable input prices and demand revival across food, personal care, and retail categories.

As Nifty slips below 25,850, FMCG stocks remain under pressure — but analysts expect recovery in H2 FY26 led by improving consumption sentiment. For investors, leaders like HUL, Nestlé India, Colgate-Palmolive, and DMart continue to offer visibility and resilience in a volatile market.

For continuing coverage on upcoming IPOs, markets, and investment insights visit our page