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Informist, Friday, Feb. 14, 2025

MUMBAI – Despite starting the week on a positive note, the shares of fast-moving consumer goods companies fell mid-week to end in the negative territory. Shares of fast-moving consumer goods companies are expected to remain weak next week, with rural demand outpacing urban areas. Analysts are expecting this trend to continue in the next two quarters at least.

Demand in urban areas has been bogged down by high rental inflation and sluggish wage growth, analysts said. Rural areas are expected to continue to exhibit strength owing to government freebies and good monsoon which may boost consumption, Nuvama Institutional Equities said. Companies prominent in rural areas are likely to outperform the growth of their peers with relatively higher prominence in urban areas, analysts said.

The Nifty FMCG index fell 0.3% Friday to 53138.55 points with more than half of its constituents closing lower. The index contracted for the second straight week as it closed in the red for the 10th consecutive session. The index is expected to face resistance at 54000 points and may find support at 52000 points, Riyank Arora, technical analyst at Mehta Equities said.
 

Even though the FMCG stocks are expected to face selling pressure, Nuvama is hopeful that the losses may be capped due to the positive impact of tax cuts in the Budget, the interest rate cut and some easing in food inflation. Food inflation in India moderated to 6.02% in January from 8.39% in December. The headline inflation moderated to a five-month low of 4.31% in January.

The brokerage firm sees rising raw materials prices to affect the gross margin of companies such as Godrej Consumer, Bikaji Foods, and Tata Consumer Products in the near term. Given a weak demand environment, companies have been cautious in passing on the rise in input costs to consumers, Nuvama said.

TOP HEADLINES

* United Breweries Oct-Dec net profit tumbles 55% YoY to INR 382.6 million
* Godfrey Phillips Oct-Dec net profit rises over 35% YoY to INR 3.32 billion
* Crompton Greaves Oct-Dec PAT rises more than 17% YoY to INR 1.12 billion
* Honasa Consumer Oct-Dec consol PAT rises 0.5% YoY to INR 260.24 million
* Heineken's India beer revenue up YoY, beer volume up in high single digit
* P&G Hygiene Oct-Dec PAT rises 17% on year to INR 2.69 bln, revenue up 10%
* Analyst Concall:Patanjali sees demand uptick post rate cut, income tax tweak
* IPO Alert: Rite Water Solutions files DRHP with SEBI for fresh issue, OFS
* Analyst Concall: Patanjali sees demand uptick post rate cut, income tax tweak
* Telangana govt ups beer procurement price 15%, against 30% sought by cos
* PRESS:Jubilant Bhartia plans INR 55-bln bond for Coca-Cola bottling ops stake
* Bata India Oct-Dec net profit rises 1.5% YoY to INR 581.67 million
* Gillette India's Oct-Dec net profit rises over 21% YoY to INR 1.26 billion
* Earnings Review: Varun Beverages consol PAT, revenue grow at multi-qtr highs
* No production activity currently at Asansol unit, clarifies United Spirits
* Balrampur Chini sales fall 3.1% YoY but PAT rises 4% in Oct-Dec
* Analyst Concall: Britannia to continue raising prices to counter input costs

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:

End

Reported by Simran Rede

Edited by Saji George Titus

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