Nifty FMCG Falls Over 1%, Down Nearly 20% In 2026; Why Are FMCG Stocks Falling?

FMCG stocks extended losses on Monday, October 19, with the Nifty FMCG index falling more than 1% as selling continued across Hindustan Unilever, ITC, Nestle India, Varun Beverages, Tata Consumer Products and other consumer stocks.

The index slipped as much as 1.37% during the session to 44,004.80. At 12:33 pm, it was trading 1.26% lower at 44,054.20, with 13 of its 15 constituents in the red.

Monday's fall adds to a weak run for FMCG stocks in 2026. The index is down around 18% this year and more than 11% over the past six months. This has come at a time when demand has remained fairly steady for several consumer companies, but higher raw-material costs have made it harder for sales growth to flow through to profits.

Varun Beverages was down 2.14% at ₹421.30, while Hindustan Unilever fell 2.06% to ₹1,854.80. Colgate-Palmolive declined 1.64% to ₹1,741.90 and Tata Consumer Products slipped 1.53% to ₹963.90. Nestle India was down 1.24% at ₹1,249.80, ITC traded 0.95% lower at ₹261 and Godrej Consumer Products fell 0.86% to ₹847.65.

Why Are FMCG Stocks Falling?

Raw-material costs have climbed again in the second half of FY27 after some relief in the previous quarter. Palm oil, sugar, packaging materials and crude-linked derivatives are among the costs that have moved higher, while the weaker rupee has made some imported inputs more expensive.

Palm oil prices in rupee terms were around 21% higher year-on-year in September. Sugar prices were also around 18% higher than a year ago, despite falling 8% from the previous month.

Companies have not passed the entire increase on to consumers. The festive season also limited the scope for sharp price increases as FMCG companies looked to protect volumes and market share. As a result, part of the increase in raw-material costs has had to be absorbed.

The impact differs across businesses. Food companies are exposed to commodities such as sugar, edible oils, wheat, cocoa and milk. For home and personal-care companies, palm oil, packaging and crude-linked derivatives form a larger part of the cost base.

Nestle India's September-quarter commentary last week gave an indication of how these costs are moving. The company expects coffee and wheat prices to remain range-bound, while sugar and edible oils are likely to stabilise at elevated levels during the December quarter. Cocoa remains volatile because of weather conditions in key producing regions, while milk prices have strengthened seasonally and are expected to ease as supplies improve.

This has put margins in focus during the Q2 earnings season. Sales growth on its own may not be enough if the cost of producing and distributing those goods is rising at the same time.

Companies could take selective price increases after the festive season if commodity costs remain high. How much they raise prices will matter for volumes, particularly in rural markets and categories where consumers can move to smaller packs or cheaper products.

Nifty FMCG Down Sharply In 2026

The weakness is not limited to Monday's trade. Nifty FMCG has been among the weaker sectoral indices this year, with the gap against the broader market widening over longer periods.

Nifty FMCG has fallen 19.58% in 2026 against an 11.42% decline in the Nifty 50. Over one year, the FMCG index is down 20.12%, compared with a 9.53% fall in the benchmark.

The index is also trading close to the lower end of its 52-week range after the sustained decline.

For the sector, the next few quarters will depend largely on how raw-material prices move and how much of the increase companies pass on to consumers. If commodity costs ease, companies will have more room to recover margins without raising prices sharply.

Until then, Q2 results will be watched for changes in volumes, gross margins and pricing, particularly among the larger FMCG companies that have seen their stocks come under sustained pressure this year.

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