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We are turning increasingly bullish on stocks of fast moving consumer goods companies that are present in categories where they have pricing power. They believe that these companies will be able to maintain margins, even if costs rise. FMCG companies have pricing power in categories like high-end skin creams, premium hair products and valueadded food products. Hindustan Unilever this week confirmed that it had increased prices of certain products by 2.5-12.9% over the last two months. The fact that the company has hiked prices despite concerns of a slowdown in the economy shows that the company is confident about its brands and is focusing on maintaining margins more than volume growth on the price hikes by Hindustan Unilever. We are bullish on companies that are investing in new product categories, as they believe that these players will be able to have better pricing power and margins in these categories. Companies like Jyothy Labs and Marico already have excellent cash flows from well established products, they are now investing this money in new high-growth categories where they will enjoy pricing power; this is a good strategy.
We are turning increasingly bullish on stocks of fast moving consumer goods companies that are present in categories where they have pricing power. They believe that these companies will be able to maintain margins, even if costs rise. FMCG companies have pricing power in categories like high-end skin creams, premium hair products and valueadded food products. Hindustan Unilever this week confirmed that it had increased prices of certain products by 2.5-12.9% over the last two months. The fact that the company has hiked prices despite concerns of a slowdown in the economy shows that the company is confident about its brands and is focusing on maintaining margins more than volume growth on the price hikes by Hindustan Unilever. We are bullish on companies that are investing in new product categories, as they believe that these players will be able to have better pricing power and margins in these categories. Companies like Jyothy Labs and Marico already have excellent cash flows from well established products, they are now investing this money in new high-growth categories where they will enjoy pricing power; this is a good strategy.
