FMCG scrips in turnaround tale

Index hits all-time high of 1189.16.

Fast-moving consumer goods (FMCG) stocks are on a roll on the bourses with the Bombay Stock Exchange (BSE) FMCG index closing at its all-time high today. The triggers for the rise, analysts said, were the recent price hikes of a few FMCG products and the prediction of a normal monsoon.

The BSE FMCG index, which was the largest gainer, closed at its lifetime high of 1,189.16 despite the Sensex reporting a 44.17 point fall to 6,663.55 from Friday's close of 6,707.72.

The Hindustan Lever, Nirma, Shaw Wallace, Marico Industries, Nestle, Britannia Industries and Dabur India scrips closed in positive territory.

GlaxoSmithkline Consumer, Colgate-Pamolive, Dabur India, Rayban Sun Optics and Vadilal Industries are trading at over two-year high prices while Nirma, Parry Agro, Marico Industries, ITC and Carnation Nutra-Analogue are trading around their all-time highs.

Shaw Wallace was the largest gainer today. The stock appreciated by 8.47 per cent to Rs 186.95 from the previous day's close of Rs 172.35.

The price of the Nirma scrip increased by 8.22 per cent to Rs 395.60 (Rs 365.55), Hindustan Lever by 4.63 per cent to Rs 144.50 (Rs 138.10), Parry Agro by 3.16 per cent to Rs 865.95 (Rs 839.45) and Marico Industries by 2.66 per cent to Rs 267.95 (Rs 261).

Dabur India at Rs 128.10 (Rs 126.70), Britannia Industries at Rs 860 (Rs 851.40), GlaxoSmithkline Consumer at Rs 375 (Rs 371.30) and Procter & Gamble at Rs 625 (Rs 620.40) were the other FMCG stocks today to close on a positive note.

FMCG companies recently hiked prices of soaps, detergents and shampoos following a rise in raw material costs and this might improve their bottom lines in the current quarter, analysts said.

Hindustan Lever has hiked the prices of its toothpaste brands, Close-Up and Pepsodent, and shampoo Sunsilk, attributing it to a rise in input costs.

FMCG companies reported marginal declines in net profits during the March 2005 quarter. A total of 30 FMCG firms posted a 1 per cent decline in their bottom line in the January-March 2005 quarter compared with a 16 per cent drop in net profit during the December 2004 quarter, 10 per cent in the September 2004 quarter and 25 per cent in the June 2004 quarter.

In the last two months the BSE FMCG index appreciated by 16.30 per cent from Rs 1,022.50 on March 29 to Rs 1,189.16 today. The Sensex during this period has gained by 4.64 per cent to 6,663.55 (6,367.86) and the S&P CNX Nifty by 4.46 per cent to 2,072.40 (1,983.85).