Dabur, Godrej Consumer, Other Nifty FMCG Stocks Gain Up To 6% - Know Why

Dabur share price and Godrej Consumer share price surged up to 6 per cent on July 7. The Nifty FMCG index also gained over 1 per cent to trade at an intraday high at 55,441.95 levels. The gains came despite the benchmark Nifty opening lower and further dropping 0.21 per cent to an intraday low of 25,407.25.

Why Are FMCG Stocks Gaining

Dabur India share price surged over 4 per cent to an intraday high of Rs 515.95 apiece on the NSE. On the other hand, Godrej Consumer Products Ltd share price surged nearly 6 per cent to an intraday high of Rs 1264 apiece on the NSE. Dabur India shares and Godrej Consumer shares emerged as the top-gainers among constituents of the Nifty FMCG index. The stocks gained after the companies shared business updates for the first quarter of FY 2025-26.

Godrej Consumer Products Ltd informed the exchanges via an exchange filing that it expects its standalone business to deliver high-single-digit value growth on the back of mid-single-digit underlying volume growth (UVG). The company also added that for the full fiscal the company is likely to achieve mid-high-single-digit underlying value growth for its standalone business and high-single-digit consolidated revenue growth and double-digit earnings before interest taxes depreciation and amortisation (EBITDA) growth. Godrej Consumer Products also mentioned in the release that the company’s profit growth is expected to remain healthy.

Dabur India shares rallied after the company informed the exchanges via a release that the company’s consolidated revenue is likely to grow in the low-single digits and the operating profit growth is expected to remain close to its revenue growth in the first quarter of FY 2025-26. The company added that it expects revenue growth to regain momentum and trend higher in the quarters coming ahead. The company added that the fundamentals of its business remain strong and its international business is likely to post double-digit constant currency growth. The company also mentioned that the strong guidance comes amid an overall sequential recovery in FMCG demand and increase in volume growth in the urban markets during the first quarter of FY 2025-26.

At the time of writing, shares of 13 constituents of the index traded in the green while two constituents declined. Other major gainers among constituents of the Nifty FMCG included Emami Ltd and Colgate Palmolive which traded higher by up to 2.85 per cent. The top constituents of the index in terms of weightage such as ITC Ltd, Hindustan Unilever Ltd, Nestle India and Tata Consumer Products Ltd traded up to 2.92 per cent higher on the NSE at the time of writing.

Shares of FMCG companies gained amid increased uncertainty ahead of the July 9 trade tariff deadline. Generally, FMCG stocks are seen as a defensive bet, this is likely to have spurred investor interest in the space amid growing uncertainty and volatility ahead of the July 9 deadline. Additionally, the FMCG sector is India-focused, wherein despite having export businesses, a large chunk of sales still come from Indian consumers. Additionally, the perception of FMCG stocks being a defensive bet also comes due to the fact that select FMCG goods are essential in nature, meaning their demand doesn’t decrease during overall economic turbulence.

Amit Agarwal, Senior VP at Fundamental Research, Kotak Securities told Outlook Money that FMCG stocks are less exposed to exogenous shocks and derive their revenue mostly from domestic consumption.

"FMCG stocks are less exposed to exogenous shocks such as global trade tensions. The sector derives the majority of its topline from domestic consumption, which remains relatively insulated from international tariff developments," Agarwal said.

Agarwal added the appeal of being a defensive bet, FMCG stocks are also gaining because of better than expected business updates from a select few companies and strong investor sentiment regarding sequential recovery in demand in in Q1FY26.

"We have seen positive and better then expected Q1FY26 update from Godrej Consumer, Dabur, Marico and Jubilant Foodworks. Hence, they are gaining. Also investors believe that Indian FMCG sector will witnessed a sequential recovery in demand with uptick in volume growth particularly in urban markets in Q1FY26," Agarwal said.