FMCG Stocks Outlook for the week – 10 to 14.04.2017
FMCG Stocks Outlook for the week – 10 to 14.04.2017
( www.rupeedesk.in )
Stocks of fast moving consumer goods companies are seen mixed in the coming week as most players are still facing headwinds despite recovery. While companies like Hindustan Unilever Ltd could trade positively, others like ITC Ltd and Britannia Industries Ltd are seen trading neutral. With rising liquidity, demand and inventory with the trade has improved substantially. Rural markets and a few wholesalers continue to be affected. In the white goods vertical companies such as Whirlpool of India Ltd, Havells India Ltd and V-Guard Industries Ltd are likely to post healthy revenue growth of 16.9%, 14.4% and 11.7% on year, respectively. However, companies focused on industrial capex (capital expenditure) and power generation equipment will continue to suffer owing to lack of pick-up in industrial demand, weak order book and intense competition. Among bellwether FMCG companies, HUL will remain in focus for the next week as the company is likely to cut jobs by as much as 10-15%, as part of its parent Unilever Plc's mandate to reduce costs. Unilever on Thursday announced its intent to save nearly 6 bln Euros in three years starting 2017. The London-headquartered company plans to overhaul its operations and will hive off its spreads business as the category remained challenged in developed markets, it had said in a filing to the London Stock Exchange. The flab shedding will mostly be done in verticals such as spreads which are being made redundant and the foods and refreshment verticals, which are being combined in one. In the long run, most companies would like to focus on rural sector growth rather than the urban markets. The growth in rural markets is also likely to happen only gradually as a fast paced expansion could put cost pressure on FMCG companies. The broad focus will be on areas where these companies are already strong. Premiumisation will be a key theme going forward.
Source : Cogencis Information Services Ltd.
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FMCG Stocks Outlook for the week – 10 to 14.04.2017
( www.rupeedesk.in )
Stocks of fast moving consumer goods companies are seen mixed in the coming week as most players are still facing headwinds despite recovery. While companies like Hindustan Unilever Ltd could trade positively, others like ITC Ltd and Britannia Industries Ltd are seen trading neutral. With rising liquidity, demand and inventory with the trade has improved substantially. Rural markets and a few wholesalers continue to be affected. In the white goods vertical companies such as Whirlpool of India Ltd, Havells India Ltd and V-Guard Industries Ltd are likely to post healthy revenue growth of 16.9%, 14.4% and 11.7% on year, respectively. However, companies focused on industrial capex (capital expenditure) and power generation equipment will continue to suffer owing to lack of pick-up in industrial demand, weak order book and intense competition. Among bellwether FMCG companies, HUL will remain in focus for the next week as the company is likely to cut jobs by as much as 10-15%, as part of its parent Unilever Plc's mandate to reduce costs. Unilever on Thursday announced its intent to save nearly 6 bln Euros in three years starting 2017. The London-headquartered company plans to overhaul its operations and will hive off its spreads business as the category remained challenged in developed markets, it had said in a filing to the London Stock Exchange. The flab shedding will mostly be done in verticals such as spreads which are being made redundant and the foods and refreshment verticals, which are being combined in one. In the long run, most companies would like to focus on rural sector growth rather than the urban markets. The growth in rural markets is also likely to happen only gradually as a fast paced expansion could put cost pressure on FMCG companies. The broad focus will be on areas where these companies are already strong. Premiumisation will be a key theme going forward.
Source : Cogencis Information Services Ltd.