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Informist, Friday, Apr. 25, 2025

MUMBAI – Shares of fast-moving consumer goods companies are seen lower next week as the March quarter earnings have raised concerns about recovery in demand. Management commentary from several companies suggests demand in urban areas has remained subdued, which has dented investor sentiment towards the sector, analysts said.

Despite the weak show in the March quarter by a few FMCG majors so far, analysts pin their hopes on rural demand, which is widely expected to improve in the coming quarters, with the projection of above-normal monsoon, healthy rabi crop produce, and the impact of the recent tweaks in tax slabs that might have helped raise income levels of consumers.

Among the major FMCG players, Hindustan Unilever reported its quarterly earnings this week. The company reduced its forecast range for earnings before interest, tax, depreciation and amortisation margin to 22-23% in the near to mid-term from the 23-24% it had expected in January as it now prioritises growth through investment. The company's net profit and revenue increased in low single digits on year but declined sequentially. This muted earnings growth was due to rising expenses and weak urban demand for packaged food and affordable personal care products squeezing margins, the company's management said at a post-earnings press conference.

Following the results, Nuvama Institutional Equities cut its earnings per share estimate for the company by 5% for 2025-26 (Apr-Mar) and FY27 due to EBITDA margin guidance. It also reduced its target price on the stock by 5% to INR 3,055, while retaining its 'buy' rating. Systematix Institutional Equities also cut HUL's FY26 and FY27 EPS estimates by 10-11% due to a sharply lower margin outlook. It also cut the target price on the stock by 9% to INR 2,410 and retained its 'hold' rating. 

Nestle India too reported its Jan-Mar numbers during the week, post which the shares of the company fell sharply Thursday. The FMCG major ended its streak of posting profit growth for 10 straight quarters, reporting a 5.2% on-year decline in its net profit for the March quarter at INR 8.9 billion, owing to high commodity prices. 

In the coming week, another FMCG major, Marico, is slated to report its earnings for the March quarter on May 2. Its net profit is expected to rise 6% on year with a 15% growth in its revenue. Varun Beverages is also set to announce its Jan-Mar earnings on Wednesday. The company's net profit is likely to grow 37% on year and its revenue is expected to rise 29%.

TOP HEADLINES

* Earnings Outlook: Britannia sales volume seen up 4-5%, but PAT seen down
* Analyst Concall: EBITDA margin guidance of 22-23% only for near-term - HUL
* No new macroecon headwinds, higher displosable income to help demand - HUL
* Earnings Review: Nestle reports drop in PAT after 10 straight qtrs of growth
* Earnings Review: Muted volume expansion restricts HUL's top line growth
* Analyst Concall: Tata Consumer eyes 30% growth in organic foods business
* Earnings Review: Tata Consumer consol PAT beats view, strongest in 11 qtrs
* Earnings Outlook: Sluggish urban demand to weigh on HUL's net sales growth
* After HC rebuke, Patanjali to take down 'disparaging' advt on Hamdard plea
* Hamdard moves HC against Patanjali Foods' disparaging advt on 'sharbat'
* Earnings Outlook:Low demand growth, high input cost to weigh on Nestle India
* Earnings Outlook: Tata Consumer consol PAT seen up 44% on yr on price hikes
* Astral to acquire Al Aziz Plastics for INR 330 million
* HUL agrees to modify 'disparaging' sunscreen advt on Honasa Consumer suit
* Earnings Outlook: Britannia sales volume seen up 4-5%, but PAT seen down
* Analyst Concall: EBITDA margin guidance of 22-23% only for near-term - HUL
* No new macroecon headwinds, higher displosable income to help demand - HUL
* Earnings Review: Nestle reports drop in PAT after 10 straight qtrs of growth
* Earnings Review: Muted volume expansion restricts HUL's top line growth
* Analyst Concall: Tata Consumer eyes 30% growth in organic foods business
* Earnings Review: Tata Consumer consol PAT beats view, strongest in 11 qtrs
* Earnings Outlook: Sluggish urban demand to weigh on HUL's net sales growth
* After HC rebuke, Patanjali to take down 'disparaging' advt on Hamdard plea
* Hamdard moves HC against Patanjali Foods' disparaging advt on 'sharbat'
* Earnings Outlook:Low demand growth, high input cost to weigh on Nestle India
* Earnings Outlook: Tata Consumer consol PAT seen up 44% on yr on price hikes
* Astral to acquire Al Aziz Plastics for INR 330 million
* HUL agrees to modify 'disparaging' sunscreen advt on Honasa Consumer suit

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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