FMCG Stocks Outlook for the week – 03 to 07.04.2017
FMCG Stocks Outlook for the week – 03 to 07.04.2017
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Stocks of fast moving consumer goods companies are seen gaining more in the coming week, as domestic business of most entities in the sector has returned to near pre-demonetisation levels. Though sales in some discretionary items are still lagging, Jan-Mar is likely to be the best quarter for 2016-17 (Apr-Mar), both in terms of sales growth and gross margins driven by new product launches, remonetisation and pricing-led growth. The focus of companies as well as of most market participants will now shift to the final tax rates under the goods and services tax, Bills related to which were passed by the Lok Sabha on Mar 29. The GST council will next meet on May 18-19 in Srinagar to discuss the fitment of goods and services in various tax slabs--0%, 5%, 12%, 18%, and 28%. Companies such as Britannia Industries Ltd would like to focus on premiumisation across product categories to tap more consumers in urban markets. In the rural segment, increased distribution could be the key. Increased expansion of the distribution network in rural areas and augmentation of the 'Tiger' portfolio would bridge the gap between Parle (Parle Products Pvt Ltd) and Britannia in rural markets. Parle Products is among the largest domestic biscuit manufacturers in India. Among other bellwether companies, Hindustan Unilever Ltd is seeing growth in demand in the retail channel, but the wholesale channel is yet to return to pre-demonetisation levels. However, the company is expecting improvement in growth driven by revival in rural demand and indicated that GST will not have any impact on volumes as company has been focusing on keeping inventory levels low at the wholesale channel since last one year.
Source : Cogencis Information Services Ltd.
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FMCG Stocks Outlook for the week – 03 to 07.04.2017
( www.rupeedesk.in )
Source : Cogencis Information Services Ltd.