FMCG
Stocks Outlook for the week – 08 to 12.12.2014
( www.rupeedesk.in )
Stocks of fast moving
consumer goods companies with an urban focus may outperform the broad
market next week, as
an improvement in the jobs market and revival in the economy stands to
benefit urban India
first.
The Urban demand that
started stagnating about two years back is likely to see significant revival
as the economy
improves and jobs come back. Companies like Nestle and Jubilant Food Works
will benefit from
this and outperform in the near term. The inflation cools and more jobs are
created in the
market, the discretionary spends of urban consumers will rise as consumers will
have more cash to
spend.
As urban India
upgrades and buys more premium products, it is obvious that these companies
will also benefit as
more products are going to be sold using the modern retail channel.
Stocks of ITC gained
last week after media reports, quoting sources, suggested that the
government may put
the plan to ban sale of loose cigarettes on the backburner. India's largest
cigarette maker ITC
would be adversely impacted if the proposal to ban sale of loose cigarettes comes into effect, as
it is estimated that about 70% of its cigarettes are sold in this manner.
