Ease in inflation amid drop in oil prices has prompted firms to defer price increases
While major companies in the FMCG sector have over the last two years clocked an average sales growth of over 6 per cent, the growth for the four underperformers is between 0.8-1.4 per cent
Thus far in September, the Nifty FMCG index underperformed the market by falling 8% against 2% decline in Nifty 50 index.
HUL, Jubilant FoodWorks, Dabur India, Nestle India, Britannia Industries, Godrej Consumer Products, Marico, and ITC were trading lower in the range of 2% to 5% on the National Stock Exchange today.
While some companies have seen margins improve, prices of key raw materials such as crude oil, titanium dioxide and copra are elevated (on a year-over-year basis) weighing on profitability of others
In the past month, wheat prices have increased 6.3% as production is expected to be 1.5% lower, in terms of crop acreage, than the earlier estimate
Raw materials, power and fuel cost grew faster than domestic companies' revenues for seven quarters in a row, biting into their margins
Both stocks and mutual funds focusing on this theme will benefit from a favourable monsoon and generous MSP hikes
Analysts attribute the volume growth to a pick-up in consumer demand in rural and urban India, which in turn lured investors to this segment
The category's blistering pace of growth is at the heart of the interest shown by these companies
Traders, retailers and manufacturers struggle to shake off the double whammy of demonetisation and GST
Analysts say the impact of trade destocking is likely to be higher in the September quarter
Analysts say sector funds are for investors with high risk appetite
Normal monsoon makes FMCG, automobile and consumer durable firms optimistic about growth prospects
GST would provide a level-playing field to organised players in the industry
Sector grows two percentage points faster than the same quarter last year: Kantar Worldpanel
Rising demand expected to sustain former's high valuations
Interested companies include ITC, Britannia & Big Basket
FMCG is followed by power and the IT sector
March quarter will be better than previous one; full recovery will be visible next financial year