Britannia, Varun Beverages Ltd Among Top FMCG Stocks; Key Industry Trends: Brokerage Report

According to the latest sales growth trends in India's food and beverages (F&B) sector, brokerage house JM Financial picked Britannia, and Varun Beverages Ltd (VBL) among top fast-moving consumer goods (FMCG) stock picks.

Currently, the Q3FY26 growth expectations are set at "8.3% (vs. 6.9% in 2Q) for our Staples coverage (ex-ITC/VBL)," it noted.

For F&B players, the sales growth surge is likely to be in "double digits" year-on-year (YoY), while for HPC entities like "HUL, Colgate, and Dabur expected to see slower sales growth, however, Marico, GCPL, and Honasa are likely to report a much better performance on YoY basis," according to a brokerage note.

Also Read: Is India A Compelling Long-Term Equity Story In 2026? - Mackenzie Report

Will India's F&B Sector Emerge Profitable in Q3FY26?

On the profitability front, "margin pressure is expected to ease with softening of input costs, which,
along with a favourable base, will result in higher EBITDA growth (we estimate c.7% YoY in 3QFY26 vs. 2.5% in 2QFY26); TCPL, Britannia, Honasa, and GCPL could be key out performers."

Meanwhile, the management commentary on December/January trends will be key to determine the pace of volume recovery and overall earnings trajectory in the coming quarters.

However, the demand trends signal to a mixed bag for staples players. The residual impact of GST transition is likely to impact sales growth for HUL/Colgate, while the outlook remains stable to improving trends for Britannia, and Marico.

Which HPC Majors Will Record Double-Digit Growth In Q3FY26?

Within the HPC segment, we expect Marico, GCPL, and Honasa to outperform with high-single-digit to double-digit domestic volume growth YoY.

HUL, and Jyothy Labs are likely to see low-single-digit volume growth while Colgate is expected to underperform with low-single-digit volume decline.

Key Expectations From Top F&B Players In 2026

1. TCPL, Britannia, Honasa and GCPL to outperform while Colgate, HUL, and Jyothy Labs may report muted performance.
2. YoY domestic volume growth to improve for Britannia and Varun Beverages, and moderate for TCPL (moderation in tea volumes) and Bikaji (due to lower packaged sweets sales) vs 2QFY26.
3. Marico, Honasa, and F&B players to see healthy sales growth; pace of recovery slower for Colgate, HUL, Dabur:
4. In the brokerage house's F&B universe, growth is expected to be higher at 11% (vs. c.8.5% in 1Q).
5. Pricing growth may moderate somewhat vs. 2Q, with price hikes coming in base (in Parachute/Saffola edible oils for Marico, in salt/tea for TCPL, in Soaps for HUL/GCPL).