High-single digit volume growth key for FMCG stocks to sustain valuation

Demand slowdown and high base compound concerns, though some companies views them as temporary headwinds

A relatively optimistic volume outlook in key categories and a sturdy profitability improvement in the March 2019 quarter (fourth quarter, or Q4)  boded well for the Marico stock — up about 6 per cent on Tuesday, when the Nifty FMCG (fast-moving consumer goods) index traded flat. 

The Nifty FMCG index has, in fact, shed about 3 per cent so far in May, ever since companies published their Q4 results. Slower volume growth in Q4 reported by some of the major names such as Hindustan Unilever (HUL), Dabur India, Britannia Industries, and Godrej Consumer Products spells bad news for the sector —