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The stocks of fast moving consumer goods companies are expected to remain muted next week as investors are likely to focus on interest rate sensitive sectors like banking and capital goods with the Reserve Bank of India scheduled to detail its mid-quarter monetary policy review on Dec 18. Within the FMCG space, we are most bullish on home-grown players like Dabur India Ltd, Jyothy Laboratories Ltd and Emami Ltd that have a strong distribution presence in rural areas. Rural sales contribute over 45% of domestic revenues of these companies. We feel home-grown FMCG players are likely to outperform their multinational peers this year as good monsoon and the state elections will result in strong rural demand. Hence, we are increasingly betting on these companies. We would advice clients to buy stocks of Dabur at the current levels. The company had displayed the ability to post strong volume growth despite tough market conditions. Going ahead, we see margins from its international business also improving. Last month, the management of Dabur had increased the holding limit for foreign institutional investors in the company to 30% from 24%. This move help support the company's stock price.
The stocks of fast moving consumer goods companies are expected to remain muted next week as investors are likely to focus on interest rate sensitive sectors like banking and capital goods with the Reserve Bank of India scheduled to detail its mid-quarter monetary policy review on Dec 18. Within the FMCG space, we are most bullish on home-grown players like Dabur India Ltd, Jyothy Laboratories Ltd and Emami Ltd that have a strong distribution presence in rural areas. Rural sales contribute over 45% of domestic revenues of these companies. We feel home-grown FMCG players are likely to outperform their multinational peers this year as good monsoon and the state elections will result in strong rural demand. Hence, we are increasingly betting on these companies. We would advice clients to buy stocks of Dabur at the current levels. The company had displayed the ability to post strong volume growth despite tough market conditions. Going ahead, we see margins from its international business also improving. Last month, the management of Dabur had increased the holding limit for foreign institutional investors in the company to 30% from 24%. This move help support the company's stock price.
