FMCG Stocks Outlook
Seen lower next week amid weak urban consumption
This story was originally published at 19:26 IST on 20 December 2024
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MUMBAI – Shares of fast-moving consumer goods companies are seen lower next week as consumption by the urban population is expected to remain muted beacause their purchasing power has been impacted adversely by persistent inflation. In a research report earlier this week, HDFC Securities said rural consumption is likely to drive growth for the sector in 2025, led by superior monsoon, adequate kharif output, and reservoir levels. However, earnings are likely to remain moderate as profitability expansion, which was led by commodity deflation, is largely over, the brokerage said.
In addition to existing demand imbalances in rural and urban areas, analysts expect recovery in the FMCG sector to be impacted by inflation in raw materials. Weak demand environment continued in November. In addition, weaker-than-expected winters in November have also impacted the offtake growth of the winter portfolio, analysts said. Analysts at Antique Stock Broking expect personal products to witness a recovery in December owing to winter.
Various consumer companies could be impacted by elevated prices of tomatoes, potatoes, and onions on an on-year basis. The sharp on-year increase in wholesale prices of tea and coffee is likely to impact margins of Nestle India Ltd., Tata Consumer Products Ltd., and Hindustan Unilever Ltd., Nirmal Bang Institutional Equities wrote in a report. Soap makers, including Hindustan Unilever and Godrej Consumer Products Ltd., also could be impacted by an increase in palm oil prices, in addition to the import duty hike announced in September.
Shares of FMCG companies haven't found favour with foreign portfolio investors so far in 2024-25 (Apr-Mar), as the FPIs added capital goods and consumer services shares, but sold oil and FMCG shares. Till November this financial year, the weightage of FMCG shares in foreign institutional investors' portfolio decreased 0.42%, YES Securities wrote in a report earlier this week.
TOP HEADLINES
* United Breweries implementing steps to save 1.5-3.0% per year in fixed costs
* Nestle India starts making KitKat at Sanand plant from Sunday, say sources
* IPO Alert: Vishal Mega Mart to list Wed; issue price set at INR 78 per share
* Patanjali Foods begins commercial production of palm oil in Arunachal mill
* Tata Consumer acquires 100% stake in Organic India from Fabindia
* ITC buys 2.4% shr in EIH for INR 1.11 bln, picks up 0.5% stake in HLV
* ITC sets Jan 6 as record date for shr allotment post demerger of hotels arm
* ITC sets Jan 1 as effective date for demerger of hotels business
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 | 290.90 | (-)5.00 | 304.10 | 283.40 |
| Britannia Industries | 4698.10 | (-)3.10 | 4855.70 | 4601.70 |
| Colgate Palmolive India | 2750.85 | (-)4.30 | 2812.50 | 2709.20 |
| Dabur India | 502.55 | (-)2.00 | 511.90 | 495.30 |
| Emami | 590.85 | (-)0.20 | 619.20 | 567.80 |
| Godrej Consumer Products | 1069.60 | (-)3.80 | 1090.50 | 1056.60 |
| Hindustan Unilever | 2333.90 | (-)2.40 | 2392.90 | 2295.20 |
| ITC | 464.65 | (-)1.10 | 472.00 | 455.70 |
| Jyothy Labs | 375.90 | (-)9.30 | 391.80 | 366.30 |
| Marico | 627.95 | (-)1.90 | 655.30 | 612.30 |
| Nestle India | 2163.50 | (-)4.00 | 2190.90 | 2131.70 |
| Procter & Gamble Hygiene and Health Care | 15114.75 | (-)3.90 | 15666.90 | 14725.00 |
| Tata Consumer Products | 889.45 | (-)4.30 | 929.90 | 862.70 |
| Varun Beverages | 612.55 | (-)5.10 | 642.10 | 594.40 |
| Nifty FMCG | 55600.80 | (-)2.20 | 56631.60 | 54957.10 |
| Nifty 50 | 23587.50 | (-)4.80 | 24258.70 | 23201.80 |
| S&P BSE Sensex | 78041.59 | (-)5.00 | 80213.70 | 76788.60 |
End
Reported by Anand JC
Edited by Deepshikha Bhardwaj
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