Despite near-term headwinds of rising input costs and the possibility of lower demand for products as Covid dented rural & urban India, and impacts both production & consumption, analysts remain bullish on stocks of fast moving consumer goods (FMCG) companies and expect the index to relatively outperform its peers in the second half of fiscal 2021-22 (FY22). In the past one year, prices of key commodities such as groundnut oil, mustard oil, Vanaspati, soya oil, sunflower oil and palm oil have shot up in the range of 20 per cent to 60 per cent, data show. The FMCG sector macros in this backdrop, according to analysts, have further deteriorated because of weakness in consumer demand and likely margin pressure due to elevated crude oil, palm oil and global food prices.
'Allocate some parts of one's surplus income towards cryptocurrencies, considering the immense growth potential of this emerging asset class.'
Around 75 per cent, or 372 stocks, that are part of the BSE500 are trading at least 10 per cent below their all-time high levels, despite the index hitting a record high 20,515 points on the BSE in intra-day trade on Wednesday, surpassing its previous high of 20,390 touched in March 12. The index, which accounts for 93 per cent of BSE listed companies' market capitalisation, has gained 8 per cent from its recent low of 18,983, touched on April 19. In comparison, the benchmark S&P BSE Sensex gained 6 per cent over the same period, but is still nearly 4.5 per cent away from its all-time high of 52,517 that it hit on February 16.
'There is a weak link between the economy and the stock market.'
'If one believes that the Indian stock market will go up 70 per cent every year for the next 10 years, I wish you good luck!'
In a bull-case scenario it sees the Sensex at 61,000 levels, while it's bear case scenario pegs the Sensex at 41,000 levels by December 2021.
Markets
'In the short term, we may see some disruptions due to Covid, but in the medium-to-long term, we should keep an eye on US inflation and 10-year bond yields.'
Agriculture activity, according to recent channel checks by Prabhudas Lilladher, is expected to continue at a strong pace in FY22.
Over the next three - six months, UBS believes earnings will be the main driver for EM equities outperformance.
'Rising Covid cases and localised lockdowns are being closely monitored.'
However, a prolonged and intense second wave that curtails oxygen supply to industries for a longer-than-expected period will exacerbate downside risk in affected sectors
While domestic market growth is important, the sales trajectory in the international markets, which account for 45 per cent of the revenues, will be a key rerating trigger, say analysts.
If the current restrictions remain in place until the end of May, we estimate that the cumulative loss of activity could amount to around $10.5 billion, or around 0.34 percentage point (pp) of annual nominal gross domestic product, say Barclays economists.
Near-term prospects hinge on the progress of the second wave of Covid-19. A lockdown will dent prospects as 60 per cent of revenues come from the dine-in segment.
The gains came on expectations that the company will post strong growth given its presence in application to peer services and the fast-growing communication platform as a service segment.
Shares of small-cap companies have been on a roll with the S&P BSE Small-Cap index hitting a new high in intra-day deals on Thursday. The rally has been fueled by an up move in stocks of chemicals, cement, graphite electrode makers, pharmaceuticals and information technology (IT) shares. In the past two weeks, since March 25, the index has outperformed the market by gaining 7.3 per cent. In comparison, the S&P BSE Midcap index was up 6.1 per cent, while the S&P BSE Sensex gained 3.6 per cent during the same period.
Given the expectations of growth in the packaged foods segment, the company seeks to become a Rs 1-trillion FMCG business by FY30.
'They can shift to dynamic asset allocation funds to automatically rebalance their equity exposure.'
Check out some of the stocks that will react on the basis of their numbers in the near term.
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