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Analysts see more pain ahead for FMCG stocks amid rising input costs

Instead of a recovery in gross margins in fiscal 2022-23 (FY23), Jefferies now builds-in 50-200 basis point (bps) YoY decline, assuming crude stays closer to $100 a barrel and palm oil at $1,500/MT

soaps, shampoo, fmcg, goods, shopping, retailers, buying sales, customers
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soaps, shampoo, fmcg, goods, shopping, retailers, buying sales, customers

Puneet Wadhwa New Delhi
Rising input costs triggered by soaring crude oil prices have dented sentiment of fast moving consumer goods (FMCG) stocks over the past few weeks. Considered a classic defensive bet in a turbulent market, investors dumped these counters even as the overall market sentiment remained choppy, as surging crude oil prices triggered an upward march in prices of most raw materials used by FMCG companies that could chip away their margins.

“Over the last quarter, prices of commodities like palm oil, crude oil and SMP (skimmed milk powder) are up 23 – 42 per cent. Crude-linked derivatives currently witnessing single digits

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First Published: Mar 24 2022 | 10:50 AM IST

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