FMCG companies face sustained margin pressure in the second half of the fiscal year as input costs rise, and firms are weighing post-Diwali price hikes against the risk of hurting demand in mass-market and rural categories. Grant Thornton Bharat's Naveen Malpani said palm oil prices in rupee terms were about 21% higher year over year in September, and sugar about 18% higher despite an 8% monthly correction. Pre-results analyst estimates projected operating-margin compression of about 45 basis points across major consumer staples companies, with some estimates up to 150 basis points. Parle Products' Mayank Shah said companies were absorbing costs through efficiencies, fewer discounts and lower advertising, with price increases possibly coming after the festive season. Nestle India expects sugar and edible oils to stay elevated in the December quarter, while El Niño and an uneven monsoon add uncertainty for food prices and rural demand.
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