Packaged food firms may witness growth rebound soon, say analysts

While reports of slower sales growth in August pulled down share prices on Monday, analysts say medium term outlook remains healthy

Investor sentiment towards packaged food majors — Nestlé, Britannia Industries (Britannia), and ITC — has taken a hit, following reports and notes by brokerages on slowing sales growth of packaged/read-to-eat products in August.

The impact was relatively sharper on Britannia and Nestlé, given their pricey valuations. While ITC fell 2 per cent on Monday, Britannia and Nestlé shed over 4 per cent each. The benchmark Sensex also lost 2.1 per cent. Analysts, however, do not see this as a major concern and believe corrections could be bought into.

Sachin Bobade, vice-president of Dolat Capital, says: “Volume growth in the June