Consumption Sector Q2 FY27

The Q2 FY27 consumption prints settle one question.

The settled question is demand. Volume growth has returned, and it is broad: HUL at 7% underlying volume growth, Marico at 10% in India, Tata Consumer at 11% branded, Godrej Consumer at 8%, Nestlé reporting double-digit volumes across product groups. After two years of debating whether the consumer was back, the quarter answers plainly.

Revenue growth across the eight major companies between 11% and 25%.

Margin outcomes range from -140bps to +200bps. It is explained by which commodity each company happens to buy. Marico’s gross margin expanded roughly 600bps — its best in 50 quarters — purely on softer copra, with material cost falling to 51.9% of revenue from 57.9%. Nestlé’s materials fell to 43.1% of product sales from 45.5%. Both converted that into 200bps of EBITDA expansion. HUL’s input costs “stayed elevated,” due to higher share of raw materials based on crude oil. Dabur’s material cost rose 13% against 11.6% revenue growth, pushing operating margin down 60bps. Tata Consumer’s tea and salt costs cut its India segment margin from 11.5% to 11.1%, with tea and coffee revenue falling 1% and tea volumes flat.

Note: Please view the table in landscape mode for better readability.

HUL: The India’s largest FMCG company posted its best sales growth in fourteen quarters and reported PAT of ₹2,796 crore against ₹2,791 crore — flat. The segment detail shows why. Home Care revenue rose 21.4% while segment profit rose 2.6%, thinning that margin to roughly 16%. Personal Care: revenue +7.9%, volumes flat, profit down about 9%. Beauty & Wellbeing was the one clean win, revenue +15.7% and profit +16.4%, led by premium skin care and an accelerating Minimalist.

Marico: Parachute coconut oil volumes rose 13% — the best in 22 quarters — while value grew about 1%. Copra deflation is passing straight through to shelf price. That is the same deflation producing Marico’s 600bps gross margin gain.

Emerging categories driving growth across companies:

Tata Consumer’s “growth businesses” grew 40% and now account for 38% of the India business, with Sampann up 57% and ready-to-drink up 47%; its tea and coffee base fell 1%. Marico’s foods portfolio grew 45% and premium personal care crossed a ₹500 crore run-rate, while Saffola edible oil volumes fell high single digits. Dabur’s food and beverages grew 17.4% while health supplements declined and honey fell mid-single digits. Titan’s international jewellery grew 105% and CaratLane 31%, against 20% for the Tanishq-Mia-Zaya core. Lenskart, the purest expression of the new cohort, grew revenue 35.7%, more than doubled PAT, and ran India same-store sales at 20.8% while adding 165 net stores.

Three quality-of-earnings flags deserve attention

Titan’s reported 13.1% jewellery EBIT margin includes a ₹536 crore customs duty benefit; excluding it, India jewellery EBIT margin is 10.7% — a 240bps difference — and statutory PAT additionally carries a ₹671 crore fair-value gain on a Damas put option liability.

Tata Consumer’s H1 operating cash flow of ₹386 crore against ₹897 crore of net profit is 43% conversion, with working capital absorbing the rest. And GCPL’s India growth was reduced roughly 150bps by a deliberate trade inventory correction, meaning its underlying number was better than printed.

Advertising spend

Marico raised A&P 44% to ₹451 crore, lifting it to 11.6% of revenue from 9.1%. Nestlé raised advertising and marketing 46%. Dabur cut advertising 3%. The companies with commodity relief are spending it on share of voice; the one under margin pressure is funding the P&L from the brand budget.

What to Watch Out For

• Separate commodity margin from franchise strength: This applies to HUL and Dabur: their compression is cyclical, and the franchise is not necessarily impaired.
• The festive shift makes Q2 an incomplete read: Titan’s management explicitly flagged a calendar shift into Q3 FY27, and the same applies across discretionary retail.
• Track new-portfolio contribution as the real KPI: Tata Consumer at 38% of its India business, Marico’s foods at +45%, Minimalist inside HUL. The migration of growth and margin into them is the durable story.

Source: All figures are Q2 FY27 (quarter ended 30 September 2026) as reported. Revenue and volume definitions differ by company — HUL reports underlying sales and volume growth, Titan’s total income excludes bullion and digital gold, and GCPL’s volume growth is consolidated — so cross-company comparisons are indicative. This note is for information purposes only and is not investment advice or a recommendation to buy or sell any security.