FMCG Stocks Outlook for the week – 02 to 06.11.2015
Range
bound next week; Marico Jul-Sep results eyed
Stocks
of fast moving consumer goods companies are seen trading range bound next
week
with Jul-Sep earnings driving the overall trend. The overhang of
lower-thanexpected
earnings
of index-heavyweight ITC is likely to weigh on the FMCG sector early
next
week. ITC was the worst hit on the Nifty yesterday, and analysts expect some
further
downside in the stock.
Stocks
of ITC, the cigarette-to-soap maker, could fall towards 320 rupees in the near
term.
Investors will keep a watch on earnings of United Spirits and Marico, which
will be
detailed
on Monday and Wednesday, respectively. United Spirits is expected to post a net
profit
of 751 mln rupees, as against a net loss of 278.30 mln rupees a year ago, while
net
sales
are likely to increase 4% to 22.49 bln rupees.
Marico's
consolidated net profit is seen rising 29% on year to 1.53 bln rupees in
Jul-Sep,
and
net sales are seen up 9% at 15.64 bln rupees. Dabur India and Godrej Consumer
Products
reported relatively better earnings in Jul-Sep. Most analysts remain positive
on
the
medium-to-long term outlook for both companies and have 'Add' or 'Buy' rating
on
the
stocks. FMCG companies benefited from low input costs as it helped improve
margins
and also gave them room to step up spend on advertising and promotions.
However,
demand scenario remains gloomy.
