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Stocks of major fast moving consumer goods companies are seen rangebound next week with a negative bias, as some investors are seen selling stocks of large-cap companies, even as investor interest in mid-cap companies persists. Investors will continue to shift to rate-sensitive companies, while large-cap FMCG stocks are expected to see downward correction as their valuations are very high. We see stocks of mid-cap companies remaining steady and even gaining as their valuations are relatively cheaper and their scope for sales growth is better. Among this category, stocks of Marico and Dabur India are seen rising. The Union Budget 2013-14 (Apr-Mar) hiked excise duty on cigarettes of over 65 mm length by 18%. We see this affecting ITC's cigarette sales volumes in the near term. But we also see its stocks gaining as they see the company passing on the duty hike to consumers due to the inelastic demand for cigarettes.
Stocks of major fast moving consumer goods companies are seen rangebound next week with a negative bias, as some investors are seen selling stocks of large-cap companies, even as investor interest in mid-cap companies persists. Investors will continue to shift to rate-sensitive companies, while large-cap FMCG stocks are expected to see downward correction as their valuations are very high. We see stocks of mid-cap companies remaining steady and even gaining as their valuations are relatively cheaper and their scope for sales growth is better. Among this category, stocks of Marico and Dabur India are seen rising. The Union Budget 2013-14 (Apr-Mar) hiked excise duty on cigarettes of over 65 mm length by 18%. We see this affecting ITC's cigarette sales volumes in the near term. But we also see its stocks gaining as they see the company passing on the duty hike to consumers due to the inelastic demand for cigarettes.
