Most consumer firms' growth rates to moderate in Q4, says CLSA

Emami

11/04/2019 10:10

** Fourth quarter of FY19 would be near-normal for most
consumer companies for the first time since demonetisation in
November 2016, though there is a slight impact in the base due
to GST tax cut in November 2018, CLSA Research says in a note
    ** Since the note ban, the sector has not seen a single
quarter of normalised base
    ** Brokerage says in Q4, macro environment appears tough,
few sectors (autos, durables) have seen weakness and management
commentary is cautious due to worries of liquidity and delayed
winters.
    ** Forecasts strong growth for Marico  MRCO.NS  , Britannia
 BRIT.NS  Hindustan Unilever Ltd  HLL.NS  and Jubilant Food
Works  JUBI.NS 
    ** Tax rate cut and restocking issue could impact firms like
Glaxosmithkline Consumer Healthcare Ltd  GLSM.NS  and Nestle
India Ltd  NEST.NS , the note says
    ** CLSA says volatility in input prices remains a worry
despite mixed trends; at the aggregate level, it expects staple
earnings before interest, tax, depreciation and amortization
(EBITDA)margins to remain almost flat YoY
    ** Quarter should be strong on growth for Westlife
Development Ltd  WEST.BO  , Asian Paints Ltd  ASPN.NS , Titan
 TITN.NS  and Jubilant Foodworks  - CLSA
    ** Dabur India Ltd  DABU.NS  and Emami Ltd  EMAM.NS  should
show weak trends, while Marico and Nestle should see strong
revenue growth, the note added
    ** Nifty FMCG index  .NIFTYFMCG  has lost 1.7 pct this year
as of Wednesday's close compared to a gain of 6.64 pct for the
broader index  .NSEI 

 ((Reuters Messaging:
chandini.m.thomsonreuters.com@reuters.net))