HUL, ITC, Varun Beverages To Drive FMCG Q3 Revival; DRChoksey Bets on Festive Momentum

Large-cap leaders such as Hindustan Unilever, ITC, Nestle India, Asian Paints, and Britannia Industries are likely to benefit from festive-led demand recovery and GST destocking normalisation in Q3 FY26..NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. .DRChoksey Report.The fast moving consumer goods sector is poised for a meaningful recovery in Q3 FY26, according to DRChoksey, as GST-related disruptions normalise and trade restocking gains momentum. The festive season, led by Diwali, is expected to drive demand across categories, while rural sentiment improves with stabilizing weather conditions. Companies are guiding for steady volume growth from November, supported by easing input costs, premiumisation, brand investments, and new product launches.Large-cap leaders such as Hindustan Unilever Ltd., ITC Ltd., Nestle India Ltd., Asian Paints Ltd., and Britannia Industries Ltd. are likely to benefit from festive-led demand recovery and GST destocking normalisation in Q3 FY26. .Discretionary and seasonal segments — beauty, packaged foods, beverages, and decorative paints — are likely to see stronger traction, aided by brand strength and premium offerings. Softer commodity costs and operating leverage should support sequential margin gains. Overall, managements view Q3 as an inflection point toward sustained volume growth into FY27..Mid- and small-cap players including Varun Beverages, Godrej Consumer, Colgate-Palmolive India, Tata Consumer, and Devyani International are projected to deliver relatively stronger momentum in Q3 FY26..International operations provide diversification benefits, while domestic demand should improve in categories such as household insecticides, premium oral care, value-added foods, and QSR.New launches, network expansion, and category extensions are likely to scale well during the festive period, with higher operating leverage helping these companies potentially outpace large-caps despite ongoing cost and competition pressures..Top Picks: DRChoksey maintains a positive stance on Varun Beverages, HUL and ITC, citing a well-balanced consumer portfolio that combines structural growth, margin resilience, and earnings visibility. Varun Beverages offers superior growth visibility driven by strong international expansion (notably Africa), diversification into energy drinks, hydration and dairy, and improving operating leverage from backward integration. HUL stands out for its premiumisation-led strategy, deep distribution strength, and stable Ebitda margins, while ITC provides a defensive-plus growth play anchored by resilient cigarette volumes, steady FMCG momentum, improving margins as input costs ease, and strong cash generation supporting consistent value creation..Click on the attachment to read the full report:.Maruti Suzuki, M&M, Happy Forgings Top Motilal Oswal’s Auto Picks Ahead of Q3 Preview — Details Inside.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

HUL, ITC, Varun Beverages To Drive FMCG Q3 Revival; DRChoksey Bets on Festive Momentum

Mid- and small-cap players are projected to deliver relatively stronger momentum in Q3 FY26.

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