FMCG Stocks Outlook for the week – 23 to 27.01.2017
FMCG Stocks Outlook for the week – 23 to 27.01.2017
( www.rupeedesk.in )
Stocks of fast moving consumer goods companies are seen under pressure next week, with markets cautious ahead of the announcement of earnings for Oct-Dec by companies in this sector. Though most companies had expected demand to improve on account of a good monsoon and the implementation of the Seventh Pay Commission's recommendations, demonetisation played a spoiler. This has impacted sales, interruption in distribution channels (small and medium channels affected), blockage in capital (cash crunch), margin pressure due to rise in input price (raw material). Prices of primary raw materials for biscuits and soaps have been on the rise for the past few weeks, and this would exert pressure on margins. While prices of wheat, a key ingredient in biscuits and cakes, have risen by nearly 200 rupees to 2,200 rupees per 100 kg in the last fortnight, those of sugar, another key ingredient, have also been on the rise. In the last 15 days, sugar prices have risen by as much as 300-350 rupees per 100 kg across key wholesales markets due to concern about lower output in 2016-17 (Oct-Sep). The price of palm oil fatty acid distillate, a key raw material for soaps and detergents, rose 60% on year in Oct-Dec. Hindustan Unilever Ltd is scheduled to announce its results for Oct-Dec on Monday. The 85-year old Indian subsidiary of Anglo-Dutch consumer major Unilever Plc is seen reporting sales of 75.3 bln rupees for Oct-Dec, down 11.2% on quarter. HUL is likely to remain range-bound next week. In a conference call on Nov 28, HUL had cautioned that demonetization could hit the company's performance in the near term. To mitigate the impact of the cash crunch, HUL was enhancing direct coverage and assortments and would maintain advertisement spend to drive offtake, the company had said in a statement. Sales volumes of some insect-repellent products, for which Godrej Consumer had raised prices in November, could take a mild hit. The company had raised the prices of some of its home insecticide products by up to 5%.
Free Intraday Tips : Join Our Whatsapp No : 9841986753
Free Commodity Tips : Join our Whatsapp No : 9094047040
FMCG Stocks Outlook for the week – 23 to 27.01.2017
( www.rupeedesk.in )
Stocks of fast moving consumer goods companies are seen under pressure next week, with markets cautious ahead of the announcement of earnings for Oct-Dec by companies in this sector. Though most companies had expected demand to improve on account of a good monsoon and the implementation of the Seventh Pay Commission's recommendations, demonetisation played a spoiler. This has impacted sales, interruption in distribution channels (small and medium channels affected), blockage in capital (cash crunch), margin pressure due to rise in input price (raw material). Prices of primary raw materials for biscuits and soaps have been on the rise for the past few weeks, and this would exert pressure on margins. While prices of wheat, a key ingredient in biscuits and cakes, have risen by nearly 200 rupees to 2,200 rupees per 100 kg in the last fortnight, those of sugar, another key ingredient, have also been on the rise. In the last 15 days, sugar prices have risen by as much as 300-350 rupees per 100 kg across key wholesales markets due to concern about lower output in 2016-17 (Oct-Sep). The price of palm oil fatty acid distillate, a key raw material for soaps and detergents, rose 60% on year in Oct-Dec. Hindustan Unilever Ltd is scheduled to announce its results for Oct-Dec on Monday. The 85-year old Indian subsidiary of Anglo-Dutch consumer major Unilever Plc is seen reporting sales of 75.3 bln rupees for Oct-Dec, down 11.2% on quarter. HUL is likely to remain range-bound next week. In a conference call on Nov 28, HUL had cautioned that demonetization could hit the company's performance in the near term. To mitigate the impact of the cash crunch, HUL was enhancing direct coverage and assortments and would maintain advertisement spend to drive offtake, the company had said in a statement. Sales volumes of some insect-repellent products, for which Godrej Consumer had raised prices in November, could take a mild hit. The company had raised the prices of some of its home insecticide products by up to 5%.
