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We believe most fast moving consumer goods sector stocks will see muted trading in the week ahead, with focus shifting to ITC Ltd in the second half of the week as the tobaccomajor is scheduled to detail its Oct-Dec earnings on Jan 17. Many big companies like TCS, HCL and HDFC Bank are coming out with their numbers next week. Focus will move to FMCG stocks only on Friday when ITC will post its earnings. ITC is likely to report a 12% year-on-year rise in revenue for Oct-Dec to 85.20 bln rupees, and net profit growth of 15% on-year to 23.5 bln rupees. We expect the tobacco-major to report a 2-3% decline in sales volumes of ITC's mainstay cigarettes business, as the company has taken price hikes of over 15% in the last two years. Also, we are expecting a lacklustre earnings season for the FMCG sector, as there has been a significant demand slowdown owing to high inflation and poor consumer sentiment. FMCG revenue growth shall remain tepid for the coming quarters, as high inflation has begun to impact consumer spending even in the staples and the trade becomes increasingly cautious on managing working capital.
We believe most fast moving consumer goods sector stocks will see muted trading in the week ahead, with focus shifting to ITC Ltd in the second half of the week as the tobaccomajor is scheduled to detail its Oct-Dec earnings on Jan 17. Many big companies like TCS, HCL and HDFC Bank are coming out with their numbers next week. Focus will move to FMCG stocks only on Friday when ITC will post its earnings. ITC is likely to report a 12% year-on-year rise in revenue for Oct-Dec to 85.20 bln rupees, and net profit growth of 15% on-year to 23.5 bln rupees. We expect the tobacco-major to report a 2-3% decline in sales volumes of ITC's mainstay cigarettes business, as the company has taken price hikes of over 15% in the last two years. Also, we are expecting a lacklustre earnings season for the FMCG sector, as there has been a significant demand slowdown owing to high inflation and poor consumer sentiment. FMCG revenue growth shall remain tepid for the coming quarters, as high inflation has begun to impact consumer spending even in the staples and the trade becomes increasingly cautious on managing working capital.
