Sector View on FMCG

Motilal Oswal Securities on ITC
THE 18% growth inQ3 PBIT has been encouraging. Growing demand and high entry barriers for other players will ensure steady double-digit profit growth. Poor performance from hotels business is already priced in. Market share of 2.5% in the toilet soaps & rising consumer acceptability in skin care is positive for the company.

Motilal Oswal Securities on Nestle

NESTLE India is best placed to ride on the expected growth in processed food market due to the strong technology of the parent company. Dominant market share and strong brands will prevent margin erosion of the company. Going ahead, high penetration and innovative prod-uct launches would further fuel its growth.

Antique Stock Broking on Britannia Industries

AFTER witnessing consistent drop for four years, Bri-tannia’s market share has stabilised over the last two years, both in value and volume terms. Going ahead, Britannia’s sales would be driven by Good Day, growing at 25-30% in the premium category and Tiger brand, growing at 18-20% in the value-for-money category.

Motilal Oswal Securities on Marico

CONSOLIDATED net sales of Marico recorded a 23% YoY growth, largely led by 15% price increases and 7% volume growth. Brands in pure coconut oil category — Parachute & Nihar — have reported a volume growth of 9% and 15%, respectively. GLobal business grew 44% YoY. Decline in copra and safflower oil prices benefited the co.

Invest Shoppe on Ruchi Soya

RUCHI Soya enjoys the leadership position in the domestic edible oil market. Its processing capacity (the largest in India), experienced mgmt, increasing share of sales from branded products and consistent profit growth despite volatile commodity prices are some of the positives. It is expected to benefit once oil prices start rising.

Invest Shoppe on McLeod Russel

THE tea price boom helped McLeod Russel to post 61.48% growth in net profit in the last quarter. It attributes the improved performance to strong domestic demand. It plans to acquire Vietnam-based Phu Ben Tea for $2 million. McLeod, the world’s largest bulk tea player, will continue to gain from increased preference to tea world over.

Stock views on Nestle, ITC

Motilal Oswal Securities on ITC

ITC’s 2QFY09 results were in line with our expectations. New FMCG business sales grew 29.4% to Rs 7,600 cr. It has been facing considerable headwinds in the cigarette business in the past couple of years. 75-80% filter cigarette conversion and expansion is positive. New FMCG is expected to remain in investment mode in the medium term. Hotels business, however, is likely to witness pressure on sales and profits.


Antique Stock Broking on NESTLE

Nestle’s dominant market share and continued innovation in the milk product category would help this business to grow at steady CAGR of 15%. We expect the prepared dishes and cooking aids category to be a key growth driver for Nestle going ahead led by an increase in penetration levels and launch of innovative variants. The decline in raw material prices would lead to higher profitability.