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Informist, Thursday, Mar. 13, 2025

MUMBAI - Shares of fast-moving consumer goods companies are expected to move in a tight range next week and are awaiting a breakout in either direction, according to analysts. The market has been under pressure as concerns over US tariffs continue to weigh on sentiment. The Nifty FMCG swung between gains and losses this week, making it difficult for analysts to predict near-term outlook. The sector recorded a net outflow of INR 54 billion by foreign portfolio investors in January and INR 69 billion in February.

The consumer sector is overvalued at 15% in March compared to 24% in the year-ago period, as per I-Sec Consumer Momentum Indicator. The demand for consumer staples continued to be weak due to underperformance in urban markets, Manoj Menon, head of research and consumer analyst at ICICI Securities, said in a report. He expects the consumer companies to report a recovery in volume growth in 2025-26 (Apr-Mar), largely driven by improved rural demand and recovery in urban markets.

Planned price increases by FMCG companies over the next few quarters are expected to manage gross margins, which are currently affected by inflated input costs. On the other hand, the decline in operating margin may be relatively lower through ad-spends moderation and cost-saving initiatives, the report said. "A rate cut combined with ongoing liquidity measures will help boost system liquidity, thereby leading to a pick-up in credit and consumption growth," Sanjay Kumar, managing diector and chief executive officer of Rassense Pvt. Ltd., said in a note. 

Easing inflation in India and the US has raised hopes of increase in consumer spending and chances of the Reserve Bank of India cutting key interest rates. Monthly returns in February from the FMCG sector fell 10% and from the consumer durables sector fell 8%, ICICI Prudential Mutual Fund said in a report. The Nifty FMCG closed 0.2% lower at 51879.25 points Thursday.

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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:

End

Reported by Simran Rede

Edited by Vandana Hingorani 

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