FMCG shares in focus; CNX FMCG index up nearly 2%

Britannia Industries, Emami, Dabur India, Hindustan Unilever and Marico were up by more than 3% each on the NSE.

 

Shares of fast moving consumer goods companies (FMCG) are in focus on Wednesday with most frontline stocks from the sector trading higher between 3%-5% on the bourses.

Britannia Industries, Emami, Dabur India, Hindustan Unilever and Marico were up by more than 3% each, while ITC, Colgate-Palmolive (India) and Procter & Gamble Hygiene and Health Care gained 1% each on the National Stock Exchange (NSE).

At 1225 hours, CNX FMCG index, the largest gainer among sectoral indices, was up nearly 2% or 300 points at 19,255 compared to 0.47% rise in the CNX Nifty.

Analysts at Sharekhan believes that improving urban sentiments (consumer confidence almost at a three-year high as per the RBI data) and rising job opportunities would act as a key catalyst for higher spending and urban consumption.

On the other hand, the overhang of the delay in monsoon and anticipated drought situation could act as a constraint to rural consumer demand, which may affect volume growth and margins in H1FY2016. "However, we believe a faster-than-expected strong recovery in the urban consumer sentiments would benefit the consumer discretionary companies," they said in a report dated June 11, 2015.

However, Sachin Bobade, analyst at Karvy Stock Broking, continues to remain cautious on the consumer sector and believes that the monsoon would play vital role in overall sector performance. In addition, ongoing concerns related to economy and rural growth would remain key challenges, going ahead, he said.

Among individual stocks, Britannia Industries up 5% at Rs 2,741 after hitting a record high of Rs 2,758 in intra-day trade on the NSE.  Emami was up 4.8% 1,060, followed by Dabur India (4.5% at Rs 268), Hindustan Unilever (3% at Rs 862) and Marico (2.7% at Rs 419).