FMCG Stocks Outlook for the week – 24 to 28.07.2017
FMCG Stocks Outlook for the week – 24 to 28.07.2017
Stocks of most fast moving consumer goods companies are seen consolidating next week as sales
across most channels have stabilised after the roll out of goods and services tax. Fast moving
consumer goods companies are expected to show lower sales number for the first half (Apr-Sep) of
the current financial year. Among bellwether companies, shares of ITC Ltd would be eyed as a price hike of 2-5% is expected soon. The price hike, however, is likely to dent sales volumes for the company. Thus, the cumulative 14-15% price hike including the 6% price hike that was taken prior to GST implementation, would put pressure on cigarette sales volume in the near term. We expect 2017-18 (Apr-Mar) to be another year of negative performance in sales volume. Stocks of ITC are likely to rise next week after falling 14.3% to a two-month low this week on the back of the increased effective tax. The GST council on Monday had increased the cess on filter cigarettes to correct an "anomaly" that was leading to windfall gains for tobacco companies. Revenue growth for ITC from its cigarette business is seen growing 5% on year driven by a 1% volume growth and price hikes.
A good monsoon this year will help increase rural demand for most of these companies and the
sales numbers could improve after October. The southwest monsoon could be nearly 98% of the
long-period average for July, supported by a pick-up in the current across India in the next few
days, according to an official at the India Meteorological Department. The company is banking on
operating efficiencies through various initiatives and cost-saving activities at supply chain and
distribution level, which should help recovery in sales in early part of Oct-Mar,
Source : Cogencis Information Services Ltd.
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FMCG Stocks Outlook for the week – 24 to 28.07.2017
( www.rupeedesk.in )
Stocks of most fast moving consumer goods companies are seen consolidating next week as sales
across most channels have stabilised after the roll out of goods and services tax. Fast moving
consumer goods companies are expected to show lower sales number for the first half (Apr-Sep) of
the current financial year. Among bellwether companies, shares of ITC Ltd would be eyed as a price hike of 2-5% is expected soon. The price hike, however, is likely to dent sales volumes for the company. Thus, the cumulative 14-15% price hike including the 6% price hike that was taken prior to GST implementation, would put pressure on cigarette sales volume in the near term. We expect 2017-18 (Apr-Mar) to be another year of negative performance in sales volume. Stocks of ITC are likely to rise next week after falling 14.3% to a two-month low this week on the back of the increased effective tax. The GST council on Monday had increased the cess on filter cigarettes to correct an "anomaly" that was leading to windfall gains for tobacco companies. Revenue growth for ITC from its cigarette business is seen growing 5% on year driven by a 1% volume growth and price hikes.
A good monsoon this year will help increase rural demand for most of these companies and the
sales numbers could improve after October. The southwest monsoon could be nearly 98% of the
long-period average for July, supported by a pick-up in the current across India in the next few
days, according to an official at the India Meteorological Department. The company is banking on
operating efficiencies through various initiatives and cost-saving activities at supply chain and
distribution level, which should help recovery in sales in early part of Oct-Mar,
Source : Cogencis Information Services Ltd.
