Roy said, “We do see that for FMCG the recovery will be a bit later. Post the GST announcement, consumers waited for lower prices and traders avoided stocking higher MRP. That’s why HUL has said even in October there could be some impact of the GST transition.”
He added, “Impulse categories like biscuits and snacks will benefit first because lower unit taxes are very high. Companies will add grammage, which will boost volume growth from November. In categories like toothpaste, long-term benefit is limited because consumption won’t rise much.”
Roy also noted ongoing challenges: “The FMCG industry is waiting for clarity on the inverted duty structure. Services and raw materials attract 18% GST while finished products are at 5%, creating some adverse impact. Recovery is there, but impulse categories, paints, and alcobev will see more benefit than toothpaste or soaps.”
On segments likely to see the biggest uptick, Roy said, “Paints, alcobev, bhujia, biscuits will benefit most. Foods like noodles, pasta, chocolates, and confectionery will also see gains. HPC categories will see smaller impact.”
On structural shifts in FMCG, he observed, “Popular price points Rs 2, 5, 10 will fully come back. GST cuts have extended their life cycle by five to seven years, creating a level playing field with unorganised players. Premiumization will also benefit as disposable income rises, and margins will improve once the inverted duty issue is resolved. Smaller towns and rural areas will continue to grow faster, and urban markets should recover from November.”With the festive season around the corner and GST rationalization stabilizing, FMCG players are monitoring the landscape to leverage both short-term boosts and long-term structural benefits. Analysts expect recovery to be selective but meaningful, particularly in impulse, discretionary, and festive-linked categories.
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