HUL, ITC, Marico Are Nomura's Top Consumer Picks As It Sees Price Hikes Supporting Growth In 2025

Hindustan Unilever Ltd., ITC Ltd. and Marico Ltd. are among Nomura's top India picks in the consumer sector for 2025. The research firm expects resurgence in price hikes that could bolster overall sales growth in the sector.

Middle-income urban households are expected to continue facing pressure due to high inflation in essential categories like housing and food. As a result, Nomura predicts that urban consumption will remain weak, and volume growth will be limited. Despite this, premium categories such as skin care, jewellery, and higher-end goods are likely to continue performing well, benefiting from the K-shaped recovery that has characterised recent consumer trends, it said.

On the supply side, organised players in the FMCG sector are likely to recover market share from unorganised regional brands, which are struggling with high raw material costs and thin margins, Nomura said. Furthermore, competition from direct-to-consumer brands is expected to ease, as these brands face challenges in scaling profitability.

For the consumer sector overall, Nomura is optimistic about the return of price hikes, which will support sales value growth in 2025. Companies will likely continue to implement gradual price increases to offset raw material inflation without risking a significant volume decline. However, margin expansion may be limited, as most consumer companies are expected to focus more on driving market share, rather than aggressively pursuing margin gains.