HUL, Varun Beverages, DMart shares: Is the worst behind in FMCG? Mirae Asset ShareKhan analyst weighs in
"The FMCG sector has always been a consumption story, and India has always had a strong consumption story. At this point, urban consumption is likely to be better than rural consumption. Rising input costs will affect margins in the near term, but that is a temporary pain," the analyst said.
- Jul 29, 2026,
- Updated Jul 29, 2026 4:11 PM IST
Thomas V Abraham, Research Analyst at Mirae Asset ShareKhan, in an interaction with BTTV on Wednesday, said the FMCG sector continues to be a long-term consumption story, although rising input costs are likely to weigh on margins in the near term.
"The FMCG sector has always been a consumption story, and India has always had a strong consumption story. At this point, urban consumption is likely to be better than rural consumption. Rising input costs will affect margins in the near term, but that is a temporary pain," he said.
On Hindustan Unilever Ltd (HUL), Abraham said the company's long-term growth prospects remain strong.
"HUL has a strong distribution network across the country. Premium segments are expected to do better in the near to medium term. Over the long term, as the consumption story strengthens, companies like HUL should benefit. The company may have to consider price hikes to protect margins, although it may not be able to pass on the entire increase in costs immediately. Once raw material costs ease, margins should improve. HUL has good potential for both top-line and bottom-line growth over the long term," he said.
On Avenue Supermarts Ltd (DMart), he said the retailer is going through a phase of realignment as competition from e-commerce intensifies, particularly in Tier-I cities.
"DMart built its business by offering products at competitive prices. Competition from online platforms has increased, especially in Tier-I cities. The company's focus is shifting towards Tier-II and Tier-III cities, where it sees better growth opportunities. It is also expanding delivery channels, home delivery and pickup options to sustain growth. The pressure on margins reflects this realignment," Abraham said.
On Varun Beverages Ltd, Abraham said the company's June quarter earnings came in below Street estimates.
Among the three companies, he remained the most positive on HUL, saying its long-term growth story remains intact.
Thomas V Abraham, Research Analyst at Mirae Asset ShareKhan, in an interaction with BTTV on Wednesday, said the FMCG sector continues to be a long-term consumption story, although rising input costs are likely to weigh on margins in the near term.
"The FMCG sector has always been a consumption story, and India has always had a strong consumption story. At this point, urban consumption is likely to be better than rural consumption. Rising input costs will affect margins in the near term, but that is a temporary pain," he said.
On Hindustan Unilever Ltd (HUL), Abraham said the company's long-term growth prospects remain strong.
"HUL has a strong distribution network across the country. Premium segments are expected to do better in the near to medium term. Over the long term, as the consumption story strengthens, companies like HUL should benefit. The company may have to consider price hikes to protect margins, although it may not be able to pass on the entire increase in costs immediately. Once raw material costs ease, margins should improve. HUL has good potential for both top-line and bottom-line growth over the long term," he said.
On Avenue Supermarts Ltd (DMart), he said the retailer is going through a phase of realignment as competition from e-commerce intensifies, particularly in Tier-I cities.
"DMart built its business by offering products at competitive prices. Competition from online platforms has increased, especially in Tier-I cities. The company's focus is shifting towards Tier-II and Tier-III cities, where it sees better growth opportunities. It is also expanding delivery channels, home delivery and pickup options to sustain growth. The pressure on margins reflects this realignment," Abraham said.
On Varun Beverages Ltd, Abraham said the company's June quarter earnings came in below Street estimates.
Among the three companies, he remained the most positive on HUL, saying its long-term growth story remains intact.