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Stocks of fast moving consumer goods companies have lost value over the past few sessions, and this trend is expected to continue in the week ahead as investors continue to book profits. HUL (Hindustan Unilever) and ITC shares are trading at multiples of their FY12 earnings and while demand looks strong, there is room for (downward) correction.
Fundamentals of FMCG companies remain strong, with good demand outlook leading to prospects of strong sales volume growth. Easing raw material prices, along with sustained price increases implemented by companies, has led to expectations of healthy margin growth for the companies. Stocks of the companies, however, do not reflect the situation on the ground as after a period of sustained appreciation in their value, there have been sessions of profit booking, which are expected to continue even at the current price level.
