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Consumer Staples Demand to Rebound from Q4 FY26: Motilal Oswal

A Motilal Oswal report forecasts a gradual demand improvement for consumer staple companies starting from the fourth quarter of FY2026. This recovery is expected to be driven by stabilising trade conditions following GST reductions and multiple supportive government initiatives. The report notes that companies have used grammage additions in low-price packs to pass on GST benefits, supporting volume growth. Furthermore, resilient rural demand, improving urban sentiment, and a favourable winter season are likely to boost consumption across several categories.

Key Points: Consumer Staples Demand Recovery Forecast from Q4 FY26

  • Demand recovery from Q4 FY26
  • Govt measures & GST stabilisation
  • Resilient rural & improving urban demand
  • Grammage additions to pass on GST benefits
2 min read

Consumer staple companies to see demand improvement from 4QFY26 with various measures by govt: Motilal Oswal

Motilal Oswal report predicts gradual demand improvement for consumer staples from Q4 FY26, driven by govt measures, GST stabilisation, and seasonal factors.

"Multiple measures have been initiated by the govt., and we expect steady improvement in demand from 4QFY26 onward - Motilal Oswal Report"

New Delhi, January 9

Consumer staple companies are expected to witness a gradual improvement in demand from the fourth quarter of FY26, supported by stabilising trade conditions after the GST reduction and multiple measures taken by the government, highlighted a report by Motilal Oswal.

The report noted that with trade gradually stabilising following the GST reduction, demand for staple products is likely to pick up steadily in the coming months. This recovery is expected to be driven by resilient rural demand and improving sentiment in urban markets.

It stated "Multiple measures have been initiated by the govt., and we expect steady improvement in demand from 4QFY26 onward".

According to the report, several government initiatives have been rolled out, which are expected to aid consumption, leading to a steady improvement in demand from 4QFY26 onwards.

Motilal Oswal said that staple companies are likely to report a sequential improvement in revenue growth as trade disruptions ease.

The report pointed out that after the implementation of GST 2.0, disruptions continued through October and partially into November, impacting business activity for nearly 40-45 days.

During this period, trade adjustments and operational challenges weighed on demand and supply chains.

However, the situation began to improve thereafter, with partial restocking helping support primary growth. The report highlighted that companies undertook grammage additions in low-unit price packs to pass on the benefits of GST rate reductions to consumers.

These measures are expected to support volume growth, especially in the packaged foods segment, as consumers receive better value without a direct increase in prices.

The report also noted that a favourable winter season is expected to further boost consumption across several categories. Products such as health supplements, personal care items, hot beverages, and other winter-sensitive goods are likely to see stronger off-take during this period.

From the fourth quarter onwards, growth is expected to better reflect underlying demand conditions as trade disruptions fully normalise.

Motilal Oswal said that rural demand is expected to remain resilient, supported by ongoing recovery trends, while urban demand has also shown signs of improvement.

The combination of stabilised trade, supportive government measures, seasonal demand, and pricing actions by companies is likely to provide a sustained push to consumption.

Overall, the report expects consumer staple companies to enter a phase of gradual but steady demand recovery from 4QFY26.

- ANI

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Reader Comments

S
Sarah B
Interesting analysis. As someone who follows the markets, Motilal Oswal's reports are usually reliable. The key will be whether companies can maintain volume growth without sacrificing margins. The timeline to 4QFY26 seems a bit distant though.
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Priyanka N
As a homemaker, I've noticed some brands have increased the quantity in their ₹10 and ₹20 packs. It's a welcome relief with inflation. If winter demand boosts sales of things like soups and creams, that's good for the economy. Let's see if this recovery is real.
A
Aman W
The report mentions "multiple measures by govt" but is vague on details. Which specific initiatives are driving this besides GST? More transparency would help. Still, if rural India is buying more, that's the foundation for sustainable growth. Jai Kisan.
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Karthik V
The disruption period of 40-45 days post-GST 2.0 was rough for small kirana stores. Glad things are stabilising. A steady recovery is better than a volatile spike. Hoping this translates to more jobs in the supply chain as well.
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Michael C
From an investment perspective, this could signal a good entry point for long-term positions in quality consumer staple stocks. The combination of policy support and seasonal factors is compelling. The focus on volume over price is the right strategy for the Indian market.

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