FMCG Stocks Outlook
Seen up next wk, new income tax rates boost sentiment
This story was originally published at 20:11 IST on 1 February 2025
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MUMBAI – Analysts expect consumption to get a boost and help shares of fast-moving consumer goods companies gain in the coming week after Finance Minister Nirmala Sitharaman slashed income tax rates in the Union Budget for 2025-26 (Apr-Mar). Shares of FMCG companies are expected to rise in the short-term as change in tax structure under the new regime may help ramp-up consumption by middle-income groups and improve the sales volume of those companies, analysts said.
Shares of FMCG companies may see some buying in the first half of the next week, said Nirav Chheda, assistant vice president of derivatives and technical research at Nirmal Bang.
Changes in personal income tax with a major revamp of income tax slabs and rates under the new income tax regime will provide a major advantage for direct-to-consumer brands, quick commerce, consumer durables, and the FMCG sector, a domestic brokerage firm said in a note. Lately, the FMCG sector has been impacted due to a slowdown in urban demand, but the stocks in this sector had corrected last week in anticipation of Budget announcements.
Shares of Hindustan Unilever, ITC, Dabur, and Nestle India are expected to benefit the most from this positive momentum as these companies have a major presence in urban as well as rural areas, analysts said in their notes. Additionally, for FMCG companies, focus on enhancing farm productivity and improving domestic value addition in food processing augur well in the medium term, said Mrunmayee Jogalekar, FMGC research analyst at Asit C Mehta Investment Intermediates, in a note.
Valuations of FMCG companies are reasonable post correction, said Onkar Kelji, research analyst at IndSec Securities. Now the focus will be more on consumption than earnings in this sector, he said. Saturday, shares of Godrej Consumer Products and Emami rose over 6%, while Adani Wilmar and Nestle India were the laggards in the sector, which rose only 0.1% and 0.6%, respectively. The Nifty FMCG index rose 4.2% over this week. ITC ended 3.4% higher and Britannia closed 1.4% higher ahead of the December quarter earnings on Feb. 6.
TOP HEADLINES
* Analyst Concall: Urban demand softens on qtr, rural improves, says Marico
* Nestle India adds INR 11-bln KitKat output line at Sanand factory in Gujarat
* Earnings Review: Marico PAT growth slowest in 9 qtrs, revenue beats Street
* HC sends Dabur, Patanjali toothpaste trade dress case to mediation
* Earnings Review: Tepid domestic sales growth weighs on Nestle India top line
* Analyst Concall:Tata Consumer sees pressure from tea prices easing in 2 qtrs
* Earnings Review:Tata Consumer spend up more than revenue rise, net unchanged
* Analyst Concall: Pressure from tea prices to ease in 2 qtrs - Tata Consumer
* Analyst Concall:Dabur set to increase prices of some pdts to sustain margins
* Earnings Review: Tata Consumer spend up more than revenue rise, net unchanged
* Earnings Review: Dabur India shows recovery in profits, sales in Oct-Dec
* Earnings Outlook: Volume growth, price hikes to boost Marico in Oct-Dec
* Radico Khaitan Oct-Dec PAT rises 30% YoY to INR 959.78 million
* Earnings Outlook: Higher tea prices to weigh down Tata Consumer in Oct-Dec
* Earnings Review: Colgate Palmolive revenue up but PAT falls on year, on qtr
* Earnings Outlook: Muted volumes may temper Nestle India's Dec qtr top line
* Earnings Outlook: Muted demand, delayed winter may hit Dabur volume growth
* Emami Oct-Dec consol PAT rises 8% YoY to INR 2.79 billion
* ITC Hotels gets NSE, BSE approval for listing on Wednesday, says ITC
* Adani Wilmar Oct-Dec consol PAT doubles on year
* Earnings Outlook: Slowdown in urban demand to impact Colgate India sales
* Earnings Review: Godrej Consumer Oct-Dec PAT down 14% on year, below view
* Analyst Concall:United Spirits eyes double-digit growth in premium pdts FY25
* Analyst Concall:Volume, value growth to improve in Jan-Mar - Godrej Consumer
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 | 266.80 | 5.90 | 277.90 | 255.60 |
| Britannia Industries | 5201.35 | 2.00 | 5538.50 | 4882.50 |
| Colgate Palmolive India | 2898.60 | 5.30 | 3070.20 | 2708.20 |
| Dabur India | 539.10 | 3.40 | 566.80 | 508.80 |
| Emami | 625.80 | 13.50 | 660.00 | 565.60 |
| Godrej Consumer Products | 1191.70 | 5.40 | 1270.90 | 1079.00 |
| Hindustan Unilever | 2506.05 | 5.80 | 2681.30 | 2347.60 |
| ITC | 462.55 | 4.70 | 489.80 | 425.90 |
| Jyothy Labs | 415.70 | 12.80 | 440.60 | 379.70 |
| Marico | 694.20 | 4.20 | 769.90 | 628.20 |
| Nestle India | 2327.20 | 5.40 | 2436.20 | 2202.70 |
| Procter & Gamble Hygiene and Health Care | 14661.30 | 0.30 | 14924.50 | 14312.50 |
| Tata Consumer Products | 1069.85 | 7.80 | 1113.50 | 993.00 |
| Varun Beverages | 561.40 | 3.60 | 605.00 | 517.30 |
| Nifty FMCG | 58396.05 | 4.20 | 61167.50 | 54666.30 |
| Nifty 50 | 23482.15 | 1.70 | 23791.80 | 23163.50 |
| S&P BSE Sensex | 77505.96 | 1.70 | 78363.10 | 76577.90 |
End
Reported by Simran Rede
Edited by Akul Nishant Akhoury
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