www.rupeedesk.in
We expect stocks of fast moving consumer goods companies to trade with a positive bias next week, as they expect sales volumes to improve going ahead on the back of good harvests and upcoming festive season. FMCG stocks have fallen from their highs as sales were down in the last few months, but with good harvests, rural demand should pick up. Markets are forward looking and the muted upcoming results are already discounted in prices of key FMCG companies. This week, the BSE FMCG index underperformed benchmark indices at it gained only 0.3% while the Nifty rose 3.2%. Some of the stocks like Marico Ltd and Colgate Palmolive (India) Ltd may report muted earnings due to higher raw material or advertising costs. He, however, recommended buying these stocks if they fall on lower-than-expected earnings. Within the FMCG space Jyothy Laboratories Ltd, Colgate India and Dabur India Ltd, as a big chunk of their revenues come from semi-urban and rural markets. India's food grain production is likely to sharply exceed the government's initial estimate of 257.8mn tonnes.
Record agricultural production will create multi-layered benefits for the broader economy by boosting the agricultural GDP, supporting rural demand and curb the trade deficit through both rising exports and lowering imports.
We expect stocks of fast moving consumer goods companies to trade with a positive bias next week, as they expect sales volumes to improve going ahead on the back of good harvests and upcoming festive season. FMCG stocks have fallen from their highs as sales were down in the last few months, but with good harvests, rural demand should pick up. Markets are forward looking and the muted upcoming results are already discounted in prices of key FMCG companies. This week, the BSE FMCG index underperformed benchmark indices at it gained only 0.3% while the Nifty rose 3.2%. Some of the stocks like Marico Ltd and Colgate Palmolive (India) Ltd may report muted earnings due to higher raw material or advertising costs. He, however, recommended buying these stocks if they fall on lower-than-expected earnings. Within the FMCG space Jyothy Laboratories Ltd, Colgate India and Dabur India Ltd, as a big chunk of their revenues come from semi-urban and rural markets. India's food grain production is likely to sharply exceed the government's initial estimate of 257.8mn tonnes.
Record agricultural production will create multi-layered benefits for the broader economy by boosting the agricultural GDP, supporting rural demand and curb the trade deficit through both rising exports and lowering imports.
