FMCG Stocks Outlook for the week – 11 to 15.05.2015
Stocks
of fast-moving consumer goods companies are likely to trade with a positive
bias
next
week on bargain buying. Optimism that the Good and Services Tax--its amendment
bill
was passed in the Lok Sabha on Wednesday--will be rolled out next year is also
seen
supporting
FMCG stocks.
We
expect the FMCG space to do well after heavyweight Hindustan Unilever reported
a
higher-than-expected
net profit for Jan-Mar. HUL posted a net profit of 10.18 bln rupees
for
Jan-Mar, up 16.7% from a year ago, on the back of improved operating margins,
and
a
one-time gain on sale of property and of arm Brooke Bond Real Estates Pvt Ltd.
Jan-Mar
earnings of most FMCG companies so far have been in line with market
estimates
or slightly above, which is seen as a positive for the sector. In the coming
week,
the
focus will be on Emami's results, which will be detailed on Wednesday.
The
broader market is expected to consolidate after the recent fall, and take
direction
from
developments in Parliament over key bills, domestic economic data and corporate
earnings
next week. On Tuesday, the Central Statistics Office will release April
Consumer
Price Index-based inflation data and Index of Industrial Production data for
March.
Over the longer run, market participants will watch out for consumer demand
patterns
and
forecasts on the southwest monsoon, which has a huge bearing on rural demand in
India.
