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Informist, Friday, Jul 26, 2024

MUMBAI – Shares of fast moving consumer goods companies are expected to rise next week, extending the rally seen this week, according to analysts. The Nifty FMCG index ended the week with 2.7% gains. Investors will now eye the earnings of FMCG majors Tata Consumer Products Ltd, ITC Ltd, and Adani Wilmar Ltd, due next week. 

Shares of FMCG companies rose sharply this week after Finance Minister Nirmala Sitharaman revised tax rates under the new regime. In the new tax regime, the standard deduction has been raised to 75,000 rupees from 50,000 rupees earlier. "This would result in savings of around 17,500 rupees in net taxes in the hands of individuals. This would benefit directly to the companies in FMCG segment such as HUL, ITC, Dabur, Nestle and second order beneficiaries would be suppliers to these FMCG giants such as Polyplex, Uflex," T. Manish, research analyst at SAMCO Securities, said in a note Tuesday.

As the macroeconomic growth story of the country looks intact and as policies to boost job creation, upskilling, and tax rationalisation are followed, there is much upside potential for these stocks going forward, Narender Singh, a small-case fund manager and founder of Growth Investing, said. By the September quarter, the demand environment is expected to pick up on the likelihood of a good monsoon and higher jobs, Singh said. 

However, one should wait and see how much of an impact the rural demand revival can have on listed companies as a major share of the rural market goes to unlisted players, Singh said. A rising discretionary consumer spending is also a boon for the industry going further, with the sole barrier being the interest rates, he added. 

Tata Consumer Products will report its June quarter figures on Tuesday. India's second largest tea retailer will likely report a 15.3% year-on-year growth in its consolidated net profit for Apr-Jun to 3.7 bln rupees, according to the average of estimates from six brokerages. Consolidated revenue is expected to increase by 16.7% year-on-year to 43.7 bln rupees. 

Further, ITC will announce its Apr-Jun earnings on Thursday. It is expected to report a 4.6% on-year growth in its net profit at 51.3 bln rupees during the quarter owing to an overall uptick in the performance of its consumer goods and hotels businesses. Its revenue is expected to grow nearly 7% on year to 169.3 bln rupees, according to the average of estimates from 11 brokerages. 

TOP HEADLINES

* United Breweries Apr-Jun PAT rises 27.3% YoY to 1.73 bln rupees
* Andhra govt plans new liquor policy, to buy from top cos, says source
* Earnings Review: Nestle Apr-Jun PAT, sales miss view as exports decline
* Bikaji Foods re-appoints Shiv Agarwal as chairman; OKs invest in arms
* United Spirits to soon roll out Godawan whisky nationally, says MD
* Bikaji Foods Apr-Jun consol PAT up nearly 41% YoY at 585.6 mln rupees
* Earnings Review: United Spirits narrowly misses Apr-Jun Street view
* Earnings Review: HUL's sales, PAT rise; volume growth tad above view
* United Spirits Apr-Jun PAT rises 25.6% YoY to 2.99 bln rupees
* Tata Consumer to issue 36.7 mln rights shares at 818 rupees/share
* HUL PAT up 2.7% YoY, sales rise amid slight recovery in rural demand
* Earnings Outlook: Price hikes to aid Nestle revenue growth Apr-Jun
* Earnings Outlook: FSN E-Commerce consol net profit may spike 390% YoY
* NCLT Kolkata bench OKs merger of 3 subsidiaries with Tata Consumer
* Patanjali Foods Apr-Jun PAT rises 3-fold YoY to 2.63 bln rupees

Following are the resistance and support levels for the stocks for next week as per calculations by Informist based on their prices on the National Stock Exchange:

End

Reported by Noel John

Edited by Deepshikha Bhardwaj

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