ITC, Dabur, Godrej Consumer among top 6 FMCG picks by experts as demand outlook brightens
Marico and Dabur have jumped over 10 per cent each over the last month, while shares of Godrej Consumer Products, Britannia Industries, United Breweries and United Spirits have jumped 5-4 per cent since last month. After three consecutive sessions of gains, the Nifty FMCG index fell over a per cent in the morning trade on Thursday, May 9, on account of profit booking amid prevailing concerns over higher interest rates, sticky inflation and caution ahead of the general election outcome. Experts remain optimistic about the FMCG space as they pin hopes on revival of rural demand.
"With the expectation of rural demand recovery and favourable seasons, FMCG industry volume growth will likely rebound in FY25E. Rural is likely to sustain recovery on a low base and improvement in seasonality, leading to overall consumption growth," said Emkay Global Financial Services. Also Read: For FMCG, rural markets finally deliver some cheer Abhishek Jain, the head of research at Arihant Capital observed that FMCG companies haven't released any groundbreaking financial reports recently.
However, there's a lot of excitement surrounding a potential agri-sector revival. This positive outlook is driving some investors towards FMCG stocks. "The hope is that a thriving agricultural sector will increase consumer spending in rural areas.
This would benefit FMCG companies that sell everyday consumer goods to these regions. Adding to this, some value investors believe FMCG stocks might be undervalued and are finding them attractive for that reason as well," said Jain. Also Read: Analysts positive on FMCG, IT and BFSI sector, here's why Brokerage firm Emkay Global prefers Dabur, Honasa Consumer, ITC and Emami from the FMCG pack.
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