FMCG Stocks Outlook for the week – 01 to 05.02.2016 Range-bound due to lack of fresh triggers

FMCG Stocks Outlook for the week – 01 to 05.02.2016

Range-bound due to lack of fresh triggers

 ( www.rupeedesk.in )

Stocks of fast-moving consumer goods companies are seen trading in a range next

week due to lack of fresh triggers as most consumer companies have already

announced their results. Most consumer goods stocks have already reacted to their

Oct-Dec results in the week and, hence, are likely to trade in a range. Marico Ltd will

announce its results on Saturday and is expected to post an 18% on-year rise in the

consolidated net profit to 1.9 bln rupees, while net sales are seen rising 10% on year

to 16.0 bln rupees.

The volume growth of consumer companies in Oct-Dec was subdued and rural

demand has not contributed to their performance. During the week, Dabur India Ltd

announced its Oct-Dec earnings and reported a 12.6% on-year rise in its consolidated

net profit to 3.18 bln rupees, however, the company reported a 2.5% on-year decline

in volumes.

Colgate Palmolive India Ltd also reported a 22% on-year rise in the standalone net

profit to 1.6 bln rupees in Oct-Dec. The toothpaste maker reported a 1% volume

growth in the Oct-Dec quarter which is the lowest in 10 years. Godrej Consumer

Products Ltd announced its earnings on Wednesday and reported a 22.5% rise in its

net profit in the Oct-Dec quarter to 3.2 bln rupees

FMCG Stock Outlook for the week – 14 to 18.12.2015 (Seen in range, bias positive; winter demand key)

FMCG Stock Outlook for the week – 14 to 18.12.2015

(Seen in range, bias positive; winter demand key)

  ( www.rupeedesk.in )

Shares of fast-moving consumer goods companies in the coming week are

expected to trade in a range with a positive bias as the onset of winter may lift

demand for cold creams and health supplements.

We expect that there were concerns over demand for winter products because

in most parts of the country winter did not set in till the first week of

December. This could have hit demand for cold creams and skincare products

as well as health supplements like Chyawanprash. Now that temperatures have

dipped, demand for these products has started to pick up which will augur well

for companies like Hindustan Unilever Ltd, Marico Ltd and Dabur India Ltd.

Also, broad market is seen upbeat to start with next week after the industrial

output numbers, announced after market hours today, surprised on the upside.

India's industrial output in October came at 9.8%, compared with a negative

2.7% a year ago and significantly above expectations of 8.0%.

Also, there are expectations that the goods and services tax bill may be passed

next during the winter session of Parliament if the ruling National Democratic

Alliance manages to convince the Congress party. Implementation of GST is

seen positive for consumer goods manufacturers and if the bill is passed, shares

of these companies may see some upside.

However, ITC shares may come under further pressure as the bill has proposed

very high rates for cigarettes. A committee headed by the Chief Economic

Advisor Arvind Subramanian has made a recommendation that if a single GST

rate cannot be implemented, then a three-tier tax structure should be

implemented with a low rate of 12% for essential items. The committee also

recommended that a standard rate of 17-18% should be implemented for most

goods and all services.

Demand has been a major concern for FMCG companies in the last few

quarters--rural demand has taken a hit, but urban demand has seen a slight

improvement--which has provided for some relief.

FMCG STOCK OUTLOOK FOR THE WEEK – 15 TO 19.09.2014

FMCG STOCK OUTLOOK FOR THE WEEK – 15 TO 19.09.2014

( www.rupeedesk.in )

Stocks of fast moving consumer goods companies are seen trading with a positive bias
next week, we bullish on stocks of mid-cap companies in the sector. While companies
like HUL (Hindustan Unilever) are touching lifetime highs, the opportunities are now in
the mid-caps like Tata Global and Marico. While Tata Global has strong value unlocking
potential, Marico will benefit from lower raw material prices.

During the week, stocks of India's largest fast moving consumer goods companies
Hindustan Unilever touched a lifetime high of 764.45 rupees on Thursday. Owing to the
strong performance of Hindustan Unilever, the BSE FMCG index rose 1.8% during the
week, outperforming the 0.13% rise in the benchmark Sensex.

Marico is set to benefit from the recent softness in the price of copra, which is a key raw
material for the company (accounting for 40% of its total cost).