FMCG Stocks Outlook for the week – 07 to 11.Jul.2014
The Union Budget for 2014-15 (Apr-Mar) to be presented on Jul 10 is likely to decide the
course of fast moving consumer goods companies' stocks next week. The FMCG stocks will
largely move according to the expectations before the Budget and on the announcement
thereon. It will toe the line of broader market, in case there are no sector-specific triggers
before the budget. In the broader market, we expect the National Stock Exchange's Nifty to
test the 8000-mark in the run up to the Budget. Any major negative surprise that dents the
Street's Budget wish list may see indices witnessing some downward correction. However,
analysts do not see a steep fall or expect the indices to top out after the Budget.
Rumours of a steep hike in the excise duty on branded cigarettes are negative for ITC Ltd,
but much of it has been already factored in. Even if excise duty is hiked, it will not make
much difference as demand for cigarette is inelastic. Hindustan Unilever Ltd is likely to trade
range-bound and the stock is still positive. As Hindustan Unilever continues to reel from the
heat of keener competition in segments such as laundry, skin care and oral care, we expect
it to continue investing in these categories.
Chaturmotha is bullish on Emami Ltd as the stock is trading at all-time high and is further
expected to keep the momentum. For Jyothy Laboratories Ltd, the business outlook is good,
and Pancholi is positive on the stock for the near-term.
The Union Budget for 2014-15 (Apr-Mar) to be presented on Jul 10 is likely to decide the
course of fast moving consumer goods companies' stocks next week. The FMCG stocks will
largely move according to the expectations before the Budget and on the announcement
thereon. It will toe the line of broader market, in case there are no sector-specific triggers
before the budget. In the broader market, we expect the National Stock Exchange's Nifty to
test the 8000-mark in the run up to the Budget. Any major negative surprise that dents the
Street's Budget wish list may see indices witnessing some downward correction. However,
analysts do not see a steep fall or expect the indices to top out after the Budget.
Rumours of a steep hike in the excise duty on branded cigarettes are negative for ITC Ltd,
but much of it has been already factored in. Even if excise duty is hiked, it will not make
much difference as demand for cigarette is inelastic. Hindustan Unilever Ltd is likely to trade
range-bound and the stock is still positive. As Hindustan Unilever continues to reel from the
heat of keener competition in segments such as laundry, skin care and oral care, we expect
it to continue investing in these categories.
Chaturmotha is bullish on Emami Ltd as the stock is trading at all-time high and is further
expected to keep the momentum. For Jyothy Laboratories Ltd, the business outlook is good,
and Pancholi is positive on the stock for the near-term.
