UBS expects India’s consumer sector to stage a strong comeback in FY26, projecting around 13% earnings growth after a subdued FY25. In its latest sector note, the brokerage said several macro and micro drivers are aligning to support a broad-based recovery across consumer categories.
Among the key tailwinds:
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Potential income stimulus from possible tax cuts and the Eighth Pay Commission over the next three years could revive discretionary spending.
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Valuation correction—with many stocks down as much as 35% since October—has made the sector attractive again.
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The sector offers defensive strength in a low-risk appetite market while also being poised to benefit if sentiment turns more risk-on.
UBS also outlined its preferred picks in the space:
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Top income stimulus plays: DMart and Trent, both of which operate resilient value-focused retail models.
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Turnaround opportunities: HUL and Godrej Consumer Products Ltd (GCPL), both considered five-year laggards now showing portfolio improvements.
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At inflection points: Colgate and Britannia, which may see earnings recovery from FY26.
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Value pick: ITC, which looks appealing after its recent correction on tax-related concerns.
The brokerage is least constructive on Asian Paints, citing sectoral disruptions, and Dabur, which continues to face portfolio execution issues. Jubilant Foodworks, it noted, has already priced in a rebound in same-store sales growth.
Disclaimer: The above views are of the broker’s and not the author or the publication’s. Please make any and every investment decision after consulting your financial advisor.
