GOLDEN RULES FOR TRADING

FMCG Stocks Outlook for the week – 26 to 30.10.2015 Positive next week; ITC, Dabur earnings in focus

FMCG Stocks Outlook for the week – 26 to 30.10.2015
Positive next week; ITC, Dabur earnings in focus

Stocks of fast moving consumer goods companies are seen positive next week due to firm
sentiment in broader market. Investors will eye earnings of index heavy-weight ITC, to
be released on Oct 30. ITC's net profit is rising 8% on year to 26.14 bln rupees in Jul-Sep,
and net sales are seen up 5% at 94.21 bln rupees. FMCG major Hindustan Unilever,
which gained 2% this week. Asian Paints earnings released yesterday were below market
expectations, which may weigh on the stock early next week.

Godrej Consumer Products' stock will also be in focus early next week post its earnings
on Saturday. Market participants will keep a watch on earnings of Dabur India and
Emami, to will be released on Wednesday and Thursday, respectively. Dabur India's
consolidated net profit is seen rising 14% on year to 3.29 bln rupees and net sales are
likely to increase 10% to 21.14 bln rupees. Fundamentals for FMCG stocks remain
mixed, as soft raw material prices are positive, while slack demand continues to be a
cause of concern.

The broader market is likely to rise owing to cut in interest rates by China, which in turn
may give some boost to the FMCG sector. China has cut its one-year lending rate and
one-year deposit rate by 25 basis points, and reduced its reserve requirement ratio by 50
basis points. Apart from this, corporate earnings and outcome of the US Federal Open
Market Committee's monetary policy meeting will lend direction to domestic share
indices next week.