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Stocks of major fast moving consumer goods companies are seen down next week due to profit booking by investors, and a shift in investment to shares of companies in other sectors. FMCG shares are currently trading at high values, and given the below-par Oct-Dec earnings of some companies such as Hindustan Unilever and Colgate Palmolive, there is room for correction in these stocks.
Over the past week, stocks of Hindustan Unilever and Colgate Palmolive India fell, even as sector heavyweight ITC gained 3.2%. Marico stocks gained 5.9% over the last five sessions, on the back of the company's Oct-Dec earnings, which were at par with market expectations.
Yesterday, Marico reported a consolidated net profit of 1.02 bln rupees for Oct-Dec, up 21.61% year on year. Net sales rose 10.85% to 11.64 bln rupees. In the near term, improved performance by companies in the information technology sector and the relatively cheap value of shares in the infrastructure space is seen attracting investors, weaning them away from FMCG stocks.
