FMCG Stock Outlook for the week - 23 to 27.03.2015
( www.rupeedesk.in )
Stocks
of fast-moving consumer goods companies are seen range bound next week on
expiry of the derivative contracts and lack of fresh triggers.
Despite
being a defensive sector, we do not expect much gain in FMCG, as among the
defensives,
pharma and IT (information technology) stocks are being favoured more.
The
FMCG stocks could get some support from short covering ahead of the derivates
contracts expiry. ITC may be in focus as it is looking to expand its presence
in the personal care segment after acquiring Savlon and Shower-to-Shower from
Johnson & Johnson. Fundamentally, FMCG companies may show improvement in
operating margins in Jan-Mar on the back of a decline in raw material costs.
However,
a concern over slow growth in sales volumes persists and this trend is likely
to
continue for the next few months, keeping the upside in stocks limited.
Most stocks in the sector have rich valuations currently, which will also
restrict the gains in many FMCG companies.