FMCG Stocks Outlook
Seen in range; rural demand may outpace urban demand
This story was originally published at 19:49 IST on 22 November 2024
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MUMBAI – Shares of fast-moving consumer goods companies are expected to trade in a range amid expectation of a recovery in rural demand in the coming quarters. But a slowdown in urban demand is likely to hurt growth. Further, there are concerns that high inflation in India is likely keep affecting demand for FMCG products.
"...the trajectory of the urban recovery will likely depend on easing of food inflation and revival of unsecured consumer lending. If these factors remain adverse, we could see downgrading in many FMCG categories," Goldman Sachs said Thursday in a report detailing its outlook for 2025.
The brokerage expects aggregate revenue of FMCG companies to grow on the back of price hikes, which would offset the impact of higher input cost. It expects companies to announce price hikes over the next six months. Owing to this and high inflation, several companies will find it difficult to increase volumes, it said. In terms of demand, they expect rural growth to outperform urban growth in the first half of 2025, and the recovery in urban growth to happen gradually over the year.
Motilal Oswal Financial Services said in a report Friday that volume growth for FMCG companies was discouraging in Jul-Sept after they witnessed a slight uptick in Apr-Jun. The rapid growth of e-commerce and quick commerce channels is putting pressure on general trade growth across the country, the brokerage said.
The Nifty FMCG index rose 2% this week, after falling for two straight weeks. Shares of Varun Beverage were the top gainer among the Nifty FMCG constituents. On Tuesday, the company said it allotted nearly 133 million shares at an issue price of INR 565 per share through a qualified institutional placement. This week, the stock rose over 7% to close at INR 616.40.
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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 | 292.35 | (-)11.70 | 311.40 | 269.50 |
| Britannia Industries | 4848.35 | (-)1.40 | 4933.70 | 4722.90 |
| Colgate Palmolive India | 2725.65 | 0.60 | 2774.50 | 2644.40 |
| Dabur India | 513.00 | 1.00 | 521.50 | 500.10 |
| Emami | 638.85 | (-)0.60 | 660.90 | 611.00 |
| Godrej Consumer Products | 1192.30 | 1.50 | 1214.60 | 1162.80 |
| Hindustan Unilever | 2445.25 | 2.40 | 2499.30 | 2350.80 |
| ITC | 474.65 | 1.90 | 489.90 | 447.90 |
| Jyothy Labs | 404.20 | (-)5.30 | 419.10 | 388.70 |
| Marico | 599.15 | 1.20 | 611.90 | 578.60 |
| Nestle India | 2247.30 | 3.00 | 2283.40 | 2186.10 |
| Procter & Gamble Hygiene and Health Care | 15870.25 | 1.10 | 16124.00 | 15610.40 |
| Tata Consumer Products | 945.20 | 2.20 | 971.20 | 899.90 |
| Varun Beverages | 616.40 | 7.10 | 633.20 | 604.20 |
| Nifty FMCG | 56956.45 | 2.10 | 58074.70 | 54983.80 |
| Nifty 50 | 23907.25 | 1.60 | 24337.90 | 23143.70 |
| S&P BSE Sensex | 79117.11 | 2.00 | 80512.20 | 76529.20 |
End
Reported by Anshul Choudhary
Edited by Akul Nishant Akhoury
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