Indian Consumer Firms Rush To Raise Prices

Indian consumer goods makers are accelerating price increases across their portfolios, as persistently high agricultural commodity costs erode margins after companies exhausted their low-cost inventory buffers, according to a JPMorgan sector survey.

Companies have implemented price hikes of 4-5% in oral care in recent weeks, with Colgate raising prices of select toothpaste variants by up to 5%. In foods, Nestle increased prices of its popular Maggi noodles by 7%, while Britannia lifted prices of its Good Day biscuits by 7-11%.

The price rises come as agricultural commodities remain stubbornly inflationary. Coffee prices surged 28% month-on-month in February, while cocoa prices, despite a 9% monthly decline, are still 22% higher over three months. Tea, wheat, and milk powder prices have also climbed, squeezing margins across the sector.

Premium beauty and personal care segments are seeing significant innovation despite the cost pressures. Hindustan Unilever expanded its premium portfolio through Lakme's texture-based makeup range and introduced new variants in TRESemme and Dove haircare lines. The company also entered the mass-market dishwash segment with a new brand, Sun, priced at Rs 99 per litre.

Quick commerce has emerged as a notable sales channel, contributing about 3% to FMCG companies' revenues. The channel is driving premiumization and improving margins.

In retail, DMart maintained its price leadership with 27% discounts versus the industry average of 16-18%, the bank wrote in a note. Overall discounting levels, however, have increased slightly month-on-month as basket prices trend upward.

The inflationary environment remains challenging, with palm oil prices up 6% month-on-month and gold prices rising 8%. Only crude oil provided some relief, declining 7% over the past month. Companies expect margin pressures to persist until agricultural commodity prices ease, likely around the second quarter of fiscal year 2026.