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Informist, Friday, Aug 9, 2024

MUMBAI – Shares of fast-moving consumer goods companies are likely to move sideways in the coming week owing to a lack of triggers, analysts said. However, these stocks are also expected to take cues from the global markets, with investors likely to buy them in case volatility in the markets increases. Healthy growth expectations owing to a likely recovery in rural demand, a good monsoon, and comfortable valuations have made these stocks appealing to investors, analysts said.

"The Indian FMCG industry growth has been steady, reflecting its resilience and adaptability. The sector experienced 4% value growth in Apr-Jun, attributed to relaxed consumption patterns. This deceleration in volumes is largely due to macroeconomic headwinds," NielsenIQ India said in a report today.

While rural volume growth continued to outpace growth in urban areas, both regions experienced softer consumption this quarter, the research agency said. Within the FMCG industry, large players continue to demonstrate stronger performance, NielsenIQ said. "Small players face challenges in keeping prices stable, thereby impacting their volumes," it said in the report.

Shares of select FMCG companies had seen some selling early this week owing to the unrest in Bangladesh. Companies like Marico have exposure in the country and the result of the recent political turmoil is expected to materialise in the upcoming quarters, some brokerages said. However, the impact of the upheaval on FMCG stocks is mostly over as the market appears to have discounted the impact it could have on the companies' earnings, Narender Singh, smallcase fund manager and founder of Growth Investing, said.

In the rural segment, products in the lower price category are doing well, while the urban segment saw an uptick in consumption in premium products, Singh said. Consumers have already accepted the price hikes by some of these companies and the new product lines of the companies are also promising, Singh added. Today, the Nifty FMCG index closed 0.2% higher at 62157.35 points. The index is expected to face resistance at 63000 points, while the support is pegged at 61000 points. 

TOP HEADLINES

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* Godfrey Phillips Apr-Jun PAT falls 24% on year to 2.23 bln rupees
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* Britannia may increase prices of some products as input costs rise
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* ITC launches new biscuits category to further its premium range
 

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 Rajeev Pai

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