New Delhi, Oct. 18 -- Fast-moving consumer goods (FMCG) companies are facing sustained pressure on profit margins in the second half of the current fiscal year as rising input costs erode profitability, prompting manufacturers to consider price increases after Diwali.

Companies are weighing the need to protect margins against the risk of weakening consumer demand, particularly in price-sensitive mass-market and rural categories. Many manufacturers have so far absorbed part of the cost increases through operational efficiencies and cost-cutting measures instead of passing on the entire burden to consumers.

Input-cost pressures intensified in the September quarter, reversing some of the moderation seen in the preceding three months. The i...