FMCG Stocks Outlook for the week – 06 to 10.02.2017
FMCG Stocks Outlook for the week – 06 to 10.02.2017
( www.rupeedesk.in )
Stocks of fast moving consumer goods companies are seen gaining in the coming week as easing liquidity crunch is expected to lead to a pick-up in demand. While most companies are likely to benefit from the situation, Colgate Palmolive India Ltd with single category presence would not be able to capitalise enough. Colgate's single category presence, rising competition with slow rural demand would continue to pressure on revenue. Besides, high advertising and sales promotion is compulsive (rather) than desired and would limit the margin expansion. The impact of demonetisation was more on discretionary items such as Dabur's hair care products, whose sales declined 22.8% on year in Oct-Dec and skin care products, whose sales declined 11.4% on year during the period. Marico Ltd's India business too witnessed a 4% volume decline mainly due to a 12% volume de-growth in value-added hair oils. Non-food FMCG sales is likely to pick up after a subdued quarter. We could see some traction in decorative paint sales after government's Budget push on affordable housing. The volume growth of most of the food-based FMCG companies, however, is likely to remain subdued in coming days. Growth will sustain only after Apr-Jun. Among bellwether companies, Hindustan Unilever and Britannia Ltd are seen trading with positive bias. While HUL could touch 880-rupee level on the National Stock Exchange. ITC Ltd is seen trading most firmly among all major companies as the excise duty levied on cigarettes in the Union Budget 2017-18 (Apr-Mar) was lower than expected. The government raised additional duty levied on filter and non-filter cigarettes, chewing tobacco, and pan masala by up to 48.5% in the Union Budget. The Budget also raised excise duty on other tobacco and tobacco products such as cigars, cheroots and cigarillos by up to 6%. This 6% hike was lower than industry expectations of 8-11% hike.
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FMCG Stocks Outlook for the week – 06 to 10.02.2017
( www.rupeedesk.in )
