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Informist, Friday, Aug 2, 2024

MUMBAI – Shares of fast-moving consumer goods companies are seen slightly lower next week as investors are expected to continue to take out profits after the recent rally in these stocks, analysts said. FMCG stocks have rallied for a couple of weeks with investors expecting rural demand to pick up after the monsoon, which is likely to be above normal this year. However, lacklustre earnings dampened sentiments, triggering a sell-off in shares of FMCG majors.

The Nifty FMCG index ended the week in the red, snapping a five-week winning streak to close 0.7% lower at 61745.15 points today. The index is expected to find resistance at 63000 points while strong support is seen at 60400 points, Shiju Koothupalakkal, technical and derivatives analyst at Prabhudas Lilladher, said.

FMCG companies are expected to grow in the coming quarters due to a gradual pickup in consumer spending and as new government policies are expected to put more money into peoples' hands, Vinit Bolinjkar, head of research at Ventura Securities, said. Investors now await the June quarter results of Godrej Consumer Products, due Wednesday. The FMCG major is expected to report nearly 50% on-year rise in consolidated net profit to 4.8 bln rupees.

The June quarter results of Tata Consumer Products, ITC, and Nestle triggered a sell-off in these shares as their bottom lines were below estimates. The numbers of most of these companies were hit by heat waves and election-related restrictions, a research analyst who covers the sector in a large domestic brokerage said. However, a gradual recovery in demand and therefore in numbers is expected, the analyst added.

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* KPR Mill Apr-Jun consol PAT unchanged on year at 2.03 bln rupees
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* Colgate India gets 2.49-bln-rupee demand order from income tax dept
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* Earnings Review: ITC misses Street view on high costs, tepid demand
* Dabur Apr-Jun consol PAT up nearly 8% YoY at 5 bln rupees

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

End

Reported by Noel John

Edited by Rajeev Pai

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