Brokerages see likely gain in FMCG stock with BJP’s return to power
Ujjwala scheme, Jal Jeevan mission, Swachh Bharat Abhiyan, and Housing for All initiatives. In Q4, the management of most FMCGs had noted action plans regarding enhancing prospect with distribution expansion." The forecast is in line with the findings of consumer intelligence firm NielsenIQ (NIQ), which reported that rural FMCG demand had outpaced urban markets for the first time in 15 months in the March quarter, although urban shoppers more than made up with increased spending on packaged items.Meanwhile, in their March quarter earnings commentary several large companies maintained a positive outlook on demand for the ongoing fiscal year.
Britannia Industries, for instance, said it is eyeing double-digit volume growth in FY25, while Dabur projected mid-to-high single-digit volume growth.Motilal Oswal Financial Services Ltd analysts pegged FMCG value growth in high single-digits for FY25 and FY26. Consumer stocks have also rallied after the general election results.
“We believe this rally in staple stocks is driven by not only its ‘defensive sector’ tag but also the underlying excitement, which was triggered by strong post-Q4 management commentary," analysts said.Motilal Oswal expects steady improvement in macro-economics and price cuts by companies, to drive a rebound in FMCG volumes. "With a prolonged slowdown in rural markets, the government can also be more active in accelerating the volume growth performance.
As of now, we do not change our volume growth assumption, but it can further drive our volume growth assumption," they said in a report released on Thursday. Milestone Alert!
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