The sector is witnessing a demand-led upcycle, with edible oils emerging as the primary growth engine. Volume growth in this segment is expected to remain robust, supported by steady consumption across key categories such as soybean, mustard, rice bran and palm oil.
The report noted “Overall volumes to grow ~13% YoY led by strong growth in Edible Oils and Industry Essentials segments”
Pricing actions, including recent hikes of around Rs 4-5 per litre, are likely to aid revenue expansion and provide near-term margin support.
Industry Essentials, comprising oleo chemicals, castor derivatives and de-oiled cake (DOC) are also contributing meaningfully to the growth trajectory. This segment has outperformed expectations, driven by recovery in industrial demand and improved realizations, indicating a cyclical upswing in downstream applications.
In contrast, the Foods and FMCG segment continues to show relatively muted momentum. While staples such as rice and wheat are witnessing healthy traction, particularly with strong growth in branded offerings, the broader packaged foods portfolio is still in a gradual recovery phase. Excluding staples, however, parts of the portfolio are seeing improving growth trends, suggesting early signs of diversification-led expansion.
Overall, the sector is expected to deliver high-teen revenue growth with double-digit volume expansion in the near term. Margins are likely to remain stable, with potential upside from inventory gains if edible oil prices sustain or firm up. However, raw material inflation remains a key monitorable. Export exposure, particularly to the Middle East, is limited and not expected to materially impact sector performance.
The report added that companies are maintaining adequate inventory levels, though raw material inflation remains a key concern. Recent price hikes and stable edible oil prices may support margins in the short term through possible inventory gains.
Going forward, sustained demand in edible oils, continued recovery in industrial-linked segments, and gradual scaling of FMCG portfolios are expected to underpin the sector’s medium-term growth outlook.