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Informist, Friday, Jun. 6, 2025

MUMBAI – Analysts see stocks in the fast-moving consumer goods sector moving in a thin range next week, though they remain positive on the fundamentals of these companies. The March quarter earnings of FMCG companies were hit by weakness in consumer demand. Higher input costs of several commodities, including palm oil, tea, and wood, had affected the profitability of FMCG companies during the quarter. However, there are hopes of a pickup in demand in the next 12–18 months, according to FMCG companies.

The growth in demand on the back of changes in tax slabs in the Union Budget will be visible through 2025-26 (Apr-Mar) and FY27, Nishant Bagrecha, research analyst at Incred Equities, said. Additionally, greater competition in the sector has dampened growth in volumes of FMCG companies, he said.

There is cautious optimism for a recovery with the potential for improved rural demand amid favourable monsoon and upcoming harvest, according to analysts and FMCG companies. The India Meteorological Department said it expects above-normal rainfall over most parts of the country during Jun-Sept.

The weather bureau has forecast 106% of the long-period average for rainfall in Jun-Sept with a model error of plus or minus 4%.

Most FMCG stocks rose Friday after Reserve Bank of India Governor Sanjay Malhotra said urban demand was seen improving and an above-normal southwest monsoon would boost the agriculture sector and demand in rural areas. On Friday, the RBI's Monetary Policy Committee cut the repo rate by 50 basis points to 5.50% and also trimmed the cash reserve ratio by 100 bps to 3.00%.

On the valuations front, Bagrecha doesn't expect any re-rating of FMCG stocks as valuations have been at the same levels for the last two years. He also expects valuations to remain at current levels unless there is an improvement in volume growth and margins of FMCG companies remain compressed. The median price-to-earnings multiple for these companies is 45–50 times for FY26, he said.   

Resistance for the Nifty FMCG is pegged at 57000 points and support at 54800 points, said Vipin Kumar, assistant vice-president of derivatives and technical at Globe Capital Market. On Friday, the Nifty FMCG closed at 55802.70 points, up 0.3%. The index extended gains for the third consecutive session Friday and has risen 0.6% over that period.

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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 Avishek Dutta

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