India's consumer sector over-valuation stretching despite demand lag, ICICI says

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20/03/2024 07:42

** India's consumer staples over-valuation continues to
stretch, discounting the lag in demand, ICICI Securities says
    ** Says volume growth recovery continues to lag, despite
firms passing on input cost reduction; expects meaningful
recovery in couple more quarters
    ** Adds even discretionary basket continues to see slowing
demand trends
    ** Says consumer sector overvaluation in March stretches to
24% over Nifty 50 index  .NSEI , from 19% in Jan
    ** Says some staples, like Hindustan Unilever  HLL.NS ,
Britannia  BRIT.NS , Colgate  COLG.NS , valued 45-50x FY25 PE
    ** Avg historic long-term fwd PE is 43-48x, per Emkay
Research   
    ** Nifty FMCG index  .NIFTYFMCG  up 0.4%; BRIT up 0.1%, HLL
down 0.7%, COLG up 1.9%
    ** FMCG index down 7% YTD vs 0.6% gain in Nifty 50

 (Reporting by Sethuraman NR in Bengaluru)
 ((Sethuraman.NR@thomsonreuters.com; (+91 9945291420); Reuters
Messaging: nallur.sethuraman.thomsonreuters.com@reuters.net))