FMCG Stocks Outlook
Seen consolidating as fundamentals priced in
This story was originally published at 19:52 IST on 30 August 2024
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MUMBAI – Shares of fast-moving consumer goods companies are expected to consolidate with a negative bias next week as most of the fundamentals are priced in at current levels, according to analysts. The overall trend for FMCG stocks remains positive, but due to the over-bought set up, they are expected to consolidate with minor dips, said Ruchit Jain, lead research analyst with 5paisa. However, one should keep a buy-on-dips approach during the lows, Jain added.
The Nifty FMCG index ended 0.2% lower at 63059.75 points today. The index also ended the week on a red note, snapping a three-week winning streak. Losses in shares of Marico, Dabur India, and ITC led the index to end lower in today's trade.
Rural demand is expected to pick up in the coming months as there are greenshoots in rural demand from the past couple of quarters, Prabhudas Lilladher said in a report today. Rural demand has been tepid since the second wave of COVID-19 due to the cautious stance of rural consumers, high inflation, deficient monsoons in 2023, and a shift in the consumer spending basket, the brokerage said.
"Normal monsoons (4% above normal until 20th), 2.1% increase in Kharif sowing area, 5-12% increase in MSP (Minimum Support prices) and stable agri input costs in diesel and fertilisers will increase agri income in coming season," Prabhudas Lilladher wrote. Going forward, the outlook for rural demand and key sectors is positive, driven by favourable monsoon expectations and improving consumer sentiment, the brokerage added.
Further, FMCG majors like Dabur and Emami reported higher growth in rural than urban areas and strong volume growth, the brokerage said. "Decline in inflation and normal monsoons should further boost demand in coming quarters," the brokerage added.
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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:
| Company | Price | Week-on-week change in % | Resistance | Support |
| Adani Wilmar | 362.00 | (-)4.00 | 372.00 | 356.00 |
| Britannia Industries | 5855.25 | 1.10 | 5968.10 | 5736.80 |
| Colgate Palmolive India | 3640.35 | 3.10 | 3729.90 | 3570.50 |
| Dabur India | 637.15 | (-)1.00 | 649.10 | 630.20 |
| Emami | 813.20 | 0.50 | 834.30 | 796.60 |
| Godrej Consumer Products | 1481.20 | 3.70 | 1500.20 | 1455.60 |
| Hindustan Unilever | 2778.00 | (-)1.30 | 2841.00 | 2728.60 |
| ITC | 501.90 | (-)0.80 | 512.70 | 494.80 |
| Jyothy Labs | 539.80 | (-)2.90 | 548.60 | 532.70 |
| Marico | 647.15 | (-)4.60 | 672.20 | 632.30 |
| Nestle India | 2500.75 | (-)1.10 | 2528.80 | 2477.80 |
| Procter & Gamble Hygiene and Health Care | 16516.25 | (-)3.50 | 16752.40 | 16246.90 |
| Tata Consumer Products | 1200.15 | 0.30 | 1213.40 | 1188.40 |
| Varun Beverages | 1500.90 | (-)5.10 | 1549.90 | 1474.50 |
| Nifty FMCG | 63059.75 | (-)0.60 | 63873.50 | 62484.60 |
| Nifty 50 | 25235.90 | 1.70 | 25303.50 | 25165.60 |
| S&P BSE Sensex | 82365.77 | 1.60 | 82800.60 | 82038.60 |
End
Reported by Noel John
Edited by Akul Nishant Akhoury
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