FMCG Stocks Outlook for the week – 02 to 05.05.2017
FMCG Stocks Outlook for the week – 02 to 05.05.2017
( www.rupeedesk.in )
Stocks of fast moving consumer goods are seen gaining in the coming week as reports of a normal
southwest monsoon are likely to provide impetus to retail and wholesale trade channel volumes. We
perceive some risk of below-normal monsoon, which can lead to slow recovery in rural growth and some impact on volumes of players with higher salience in rural areas. However, the recent forecast suggests decreasing probability of El Nino, which is a positive. FMCG companies are also likely to take some pricing action in coming days before the goods and services tax, which is likely to be rolled out from Jul 1, kicks in. After three years of soft single-digit sales growth, the sector is set to revert to double-digit surge trajectory. This will be anchored by return of the pricing power, anticipated improvement in GDP, and jump in share of organised players triggered by GST implementation.
Though GST will usher in efficiency and ease of doing business, it will lead to marginal increase in
working capital requirement for various stakeholders in the overall distribution as the goods and
services tax will be levied on supply of goods even if that supply is between warehouses, the report said.
Source : Cogencis Information Services Ltd.
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FMCG Stocks Outlook for the week – 02 to 05.05.2017
( www.rupeedesk.in )
Stocks of fast moving consumer goods are seen gaining in the coming week as reports of a normal
southwest monsoon are likely to provide impetus to retail and wholesale trade channel volumes. We
perceive some risk of below-normal monsoon, which can lead to slow recovery in rural growth and some impact on volumes of players with higher salience in rural areas. However, the recent forecast suggests decreasing probability of El Nino, which is a positive. FMCG companies are also likely to take some pricing action in coming days before the goods and services tax, which is likely to be rolled out from Jul 1, kicks in. After three years of soft single-digit sales growth, the sector is set to revert to double-digit surge trajectory. This will be anchored by return of the pricing power, anticipated improvement in GDP, and jump in share of organised players triggered by GST implementation.
Though GST will usher in efficiency and ease of doing business, it will lead to marginal increase in
working capital requirement for various stakeholders in the overall distribution as the goods and
services tax will be levied on supply of goods even if that supply is between warehouses, the report said.
Source : Cogencis Information Services Ltd.