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Informist, Friday, Aug. 22, 2025

MUMBAI – Fast-moving consumer stocks are likely to continue their range-bound movement next week. These stocks will continue their defensive nature in the coming weeks, a fundamental analyst at a domestic brokerage said. Market sentiment around the FMCG sector has improved with multiple positive triggers coming in a row. Moreover, investors will prefer FMCG stocks as they are a safer bet due to their defensive nature on account of their dependency on domestic demand rather than exports, amid uncertainty over US tariffs.

The proposed lowering of GST rate slabs is likely to improve the earnings of sectors such as consumer durables and fast-moving consumer goods. The reform is expected to revive demand, which has been subdued recently, in the second half of the current financial year, benefiting consumer-facing sectors such as automobiles and FMCG, analysts said.

GST reforms, income tax relief, the lowering of the repo rate by the Reserve Bank of India, the easing of India's CPI inflation for July to 1.55%, its lowest since June 2017, and above-normal monsoon have altogether boosted optimism around FMCG and consumer-facing companies. According to Nuvama Institutional Equities, if the GST proposal is cleared and implemented, Bikaji Foods is expected to be one of the major beneficiaries in the FMCG sector, as nearly 70% of the company's business attracts a GST rate of 12%. Among other companies, nearly 60% of Emami's business and around 24% of Dabur India's business will benefit from the consolidation in GST tax rates.

Further, if cigarettes are placed at the special slab rate of 40%, there may be a dip in demand in the short term, an analyst at a domestic brokerage house said. However, Nuvama Institutional Equities said: "We do not expect a sharp increase in cigarettes (prices), more of bucket reclassification given the government has been focusing on reducing the share of illegal cigarette players for the past many years."

Malaysian crude palm oil prices have surged 16% since the lows seen in May due to weak production in Indonesia, Emkay Global Financial Services said in a report. "If prices are firm in 2H (Oct-Mar), we expect price hikes by companies; this may not impact demand, given the expected comfort from easing in indirect tax," the brokerage said.

Competition from small players has restricted growth for incumbents in the sector. Further, the rise of quick commerce has aided these direct-to-consumer firms to gain market share, Onkar Kelji, a research analyst at IndSec Securities and Finance, said.

The Nifty FMCG is likely to be in a range of 54600–56800 points, Vipin Kumar, assistant vice-president and senior derivatives analyst at Globe Capital Market, said. Friday, the index closed 1% lower at 55737.45 points. During the week, it ended higher after falling for two previous weeks. However, the index is down 0.1% so far in August.

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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 and Shakshi Jain

Edited by Saji George Titus

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