FMCG Stocks Outlook for the week – 21 to 25.11.2016
Stocks of fast moving consumer goods companies are seen under pressure next week as a cash crunch following a demonetisation order of the government has hit retail sales. On Nov 8, Prime Minister Narendra Modi announced that 500-, and 1,000-rupee notes would no longer remain legal tender. Even the exchange process of invalid notes has been slow and this reduced the cash in circulation. Consequently, business across sectors has declined in the range of 30-80% in the first five days. The expenditure on premium FMCG products has taken the brunt of this hit as people are shying away from spending on non-essential items. The footfall in malls, restaurants, showrooms and other such places has taken a hit. Among major FMCG companies, Hindustan Unilever Ltd, ITC Ltd, Britannia Industries Ltd and Dabur India Ltd could face more pressure as these companies have a deep rural presence. ITC has been under pressure as sales have taken a hit of up to 40% in the past 10 days.
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Stocks of fast moving consumer goods companies are seen under pressure next week as a cash crunch following a demonetisation order of the government has hit retail sales. On Nov 8, Prime Minister Narendra Modi announced that 500-, and 1,000-rupee notes would no longer remain legal tender. Even the exchange process of invalid notes has been slow and this reduced the cash in circulation. Consequently, business across sectors has declined in the range of 30-80% in the first five days. The expenditure on premium FMCG products has taken the brunt of this hit as people are shying away from spending on non-essential items. The footfall in malls, restaurants, showrooms and other such places has taken a hit. Among major FMCG companies, Hindustan Unilever Ltd, ITC Ltd, Britannia Industries Ltd and Dabur India Ltd could face more pressure as these companies have a deep rural presence. ITC has been under pressure as sales have taken a hit of up to 40% in the past 10 days.
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