New Delhi, May 27: Major food companies report that consumer demand has remained stable at the start of the fiscal year 2027. However, the ongoing crisis in the Middle East may impact demand and profits in the short term, according to a new report released on Wednesday.
JM Financial Research indicates that tensions in West Asia have led to increased input costs, including raw materials, packaging, and palm oil prices, as of March. This crisis has also affected currency and supply chains.
The report notes that many companies have raised prices by 3-7% due to the crisis.
According to the findings, “Early trends for the first quarter of fiscal year 2027 suggest stable volumes following price increases. However, close monitoring of demand is essential.”
The January-March quarter (the fourth quarter of fiscal year 2026) saw significant stability in overall consumer demand, attributed to lower inflation and the benefits of reduced GST rates.
The report highlights that the food and beverage sector has continued to outperform high-quality food products. Most companies have experienced volume-based sales growth, with margin profiles remaining largely stable, supported by lower price increases and production. Management comments indicate trends of demand that are stable or better.
Furthermore, domestic consumption has become a key pillar of India’s economy. The growing middle class is driving demand for products such as automobiles, electronics, healthcare, and housing.
Strong rural consumption persists due to positive signals from both agricultural and non-agricultural activities. Urban consumption has consistently increased since the last festive season, supported by fiscal incentives. With the government promoting consumption through GST, the rise in credit continues.
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