FMCG Stocks Outlook: 30.07.2012 - 03.08.2012
Stocks of major fast-moving consumer goods companies
are seen up in the week ahead tracking the positive Apr-Jun earnings of
companies such as ITC and Hindustan Lever. Index heavyweight Hindustan
Unilever's Apr-Jun earnings, declared Monday and aided a 4.2% rally in its
stock during the week. Similarly, stocks of ITC Ltd gained during the week
as the company's Apr-Jun earnings came tad above market estimates, but its
stocks pared gains on profit booking. Marico Ltd and Godrej Consumer
Products Ltd will declare their Apr-Jun earnings on Aug 3 and Aug 4,
respectively, and these will dictate the trend in these stocks.
The companies are expected to post a healthy growth in
earnings on robust sales volume growth and lower raw material costs. Over
the past week, the BSE FMCG index gained 0.8% on positive Apr-Jun earnings
of Hindustan Unilever and ITC, while the broader indices lost nearly 2% of
their value. The momentum in the FMCG stocks is expected to continue
through next week. Going ahead, there are short-term concerns about the
companies' profitability, given the fact that weak monsoon rains will
affect their performance by escalating raw material costs and curtailing
rural disposable income and demand. Stocks of FMCG companies are expected
to continue outperforming the broader market due to economic slowdown that
has affected other sectors more than FMCG companies.
By RUPEE DESK [email protected]
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