FMCG Stocks Outlook
Sentiment positive next week, short-covering expected
This story was originally published at 19:26 IST on 6 December 2024
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MUMBAI – Shares of fast-moving consumer goods companies are expected to see a positive week ahead. Analysts expect an upside of 59700 for the Nifty FMCG index, and some short-covering in the overall sector in the coming week. Tata Consumer Products Ltd. and ITC Ltd. are the preferred stocks in the segment, Jatin Gedia of Sharekhan Ltd. said.
Consumer goods companies flagged slowing consumption demand in the first half of 2024-25 (Apr-Mar). A recovery in consumption in India is expected to be pushed to FY26, Emkay Global Research said in a report earlier this week. "There have been multiple macro challenges – high base, weak jobs market, and credit tightening by the Reserve Bank of India," the report said. A turnaround in these factors is expected to take at least two-three quarters, with a revival expected to be seen only in FY26, Emkay Global Research said.
Volumes of staples were impacted in Jul-Sept by subdued macroeconomic conditions, inventory corrections, adverse weather and persistently high inflation. FMCG companies spoke of pressure on the sector due to the rapid growth of e-commerce and quick-commerce channels, which challenged the growth of general trade channels. "Gross margins for most companies remained under stress due to rising inflation, though a few companies managed post earnings before interest, taxes, depreciation, and amortisation margin expansion by controlling their advertisement and promotional spends," Motilal Oswal Financial Services said in a report. It expects FMCG companies to implement price hikes in Oct-Mar to offset rising raw material costs.
On Friday, Godrej Consumer Products Ltd. said that owing to rising input costs in some segments and weather troubles affecting some others, it expects to report flattish underlying volume growth and around mid-single-digit sales growth in Oct-Dec.
RBI Governor Shaktikanta Das on Friday pointed out that within consumption, rural demand continues to suggest improvement, while urban demand is softening, impacted by a high base. Based on high-frequency indicators, the central bank said the slowdown in domestic economic activity bottomed out in Jul-Sept and has since recovered, aided by strong festival season demand and a pickup in rural activities.
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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 | 312.85 | (-)0.30 | 317.40 | 306.80 |
| Britannia Industries | 4870.85 | (-)1.40 | 4939.20 | 4805.80 |
| Colgate Palmolive India | 2886.80 | (-)0.10 | 2949.80 | 2842.30 |
| Dabur India | 523.80 | (-)0.60 | 528.90 | 517.70 |
| Emami | 642.50 | (-)6.10 | 651.40 | 629.70 |
| Godrej Consumer Products | 1235.45 | (-)0.70 | 1264.80 | 1216.00 |
| Hindustan Unilever | 2483.80 | (-)0.50 | 2505.70 | 2464.10 |
| ITC | 471.15 | (-)1.20 | 478.50 | 464.00 |
| Jyothy Labs | 423.05 | 0.70 | 432.90 | 408.20 |
| Marico | 633.65 | (-)1.80 | 643.10 | 626.30 |
| Nestle India | 2267.80 | 1.50 | 2308.50 | 2234.80 |
| Procter & Gamble Hygiene and Health Care | 15874.80 | (-)0.10 | 16028.30 | 15674.30 |
| Tata Consumer Products | 974.45 | 1.70 | 984.00 | 959.40 |
| Varun Beverages | 644.05 | 3.70 | 657.20 | 619.60 |
| Nifty FMCG | 57744.30 | (-)0.30 | 58176.80 | 57385.90 |
| Nifty 50 | 24677.80 | 2.30 | 24813.70 | 24552.60 |
| S&P BSE Sensex | 81709.12 | 2.40 | 82133.50 | 81294.00 |
End
Reported by Anand JC
Edited by Avishek Dutta
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