Consumer staple companies are likely to see a gradual revival in demand starting from the fourth quarter of FY26, as trade conditions stabilize after recent GST changes and multiple government measures begin to support consumption, according to a report by Motilal Oswal.
The brokerage said that disruptions caused by the rollout of GST 2.0 weighed on business activity through October and partly into November, affecting trade for nearly 40–45 days. These disruptions led to temporary supply chain challenges and uneven demand patterns across FMCG categories. However, conditions have since started improving, supported by partial restocking by distributors and retailers.
“With trade gradually stabilizing after the GST reduction, we expect steady improvement in demand from 4QFY26 onward,” Motilal Oswal said in its report, adding that several government initiatives aimed at boosting consumption should also start showing results in the coming months.
To pass on the benefits of lower GST rates to consumers, companies have introduced grammage additions in low-unit price packs, allowing buyers to get more quantity without a direct increase in prices. This strategy is expected to support volume growth, particularly in the packaged foods segment, where value-for-money plays a critical role in driving purchases.
The report also highlighted that a favourable winter season should further lift consumption across multiple categories. Products such as health supplements, hot beverages, personal care items and other winter-linked goods are likely to witness stronger demand during this period.
Motilal Oswal said that from the fourth quarter, reported growth should better reflect underlying demand as trade disruptions fully normalize. Rural markets are expected to remain resilient, while urban demand has also begun to show early signs of recovery.
Overall, the brokerage expects a combination of stabilized trade, supportive government measures, seasonal tailwinds and pricing actions by companies to create a sustained improvement in consumption trends, setting the stage for a steady recovery in India’s consumer staples sector from Q4FY26 onwards.