FMCG Stocks Outlook for the week – 10 to 14.08.2015
(Rangebound
with negative bias)
( www.rupeedesk.in )
MUMBAI
- Shares of fast moving consumer goods companies are expected to trade
rangebound
next
week amid lack of fresh triggers as a majority of the companies in the sector
have already
detailed
their Apr-Jun earnings. However, concern over weak monsoon may continue to
weigh on the overall sentiment, as this will negatively impact rural demand for
consumer goods.
Earlier
this week, the India Meteorological Department kept its forecast for Jul-Sep
monsoon rains unchanged at 88% of the long period average but pegged Aug-Sep
rainfall to be below normal at 84%. This earnings season saw most FMCG
companies posting better volume growth in sales which is a positive, but
increasing competition in various categories has capped price realisation.
We
remain positive on the sector as we expect higher A&P spends to drive
volume growth and
commodity
cost tailwinds to support margin gains.
The
sector may continue to take cues from broader markets and key economic data
that will be
released
next week. Index of industrial production for June and inflation based on
consumer price index and wholesale price index for July will be released next
week.