Consumer demand, GST to help FMCG firms; valuations to remain high: Experts

While some companies have seen margins improve, prices of key raw materials such as crude oil, titanium dioxide and copra are elevated (on a year-over-year basis) weighing on profitability of others

A strong performance is rewarded, whether it’s a field of sport, movie or the equity market. And it is exactly what most fast-moving consumer goods (FMCG) firms are set to benefit from.

After some choppiness in the past few quarters due to note ban and the goods and services tax (GST) roll-out, many companies have posted a good volume growth in the June 2018 quarter. And the road ahead is expected to be even steadier. It won’t be surprising if investors’ love for this pack persists, keeping stock valuations or price-to-earnings ratio (P/E) elevated.

P/E is the companies’ share price divided by