FMCG Stocks Outlook for the week (16-20.07.2012)
Stocks of fast moving consumer goods companies are seen down
next week as leading companies of the sector are likely to post weak sales
volume for Apr-Jun. The Apr-Jun earnings of companies would be in focus.
Index heavyweights Hindustan Unilever Ltd and Dabur India Ltd will declare their Apr-Jun earnings on Jul 23. Marico Ltd will declare the quarter's earnings on Aug 3 and Godrej Consumer Products Ltd will announce its result on Aug 4.
Even as a weak monsoon is threatening to dent earnings of FMCG companies, they are working towards new strategies to counter this. These strategies include promoting low-price products, introducing new offerings to prevent consumers from down-trading, and stepping up marketing efforts to strengthen top-of-the-mind recall and sales.
Monsoon rains have been 23% below normal so far this season. But we reckon that FMCG stocks will continue to outperform broader indices in the near future, because of the expected volatility the latter. Even over the past week, the BSE FMCG index remained flat, when the broader indices lost 1.8% in value.
