Indian consumption stocks are waiting for taxation

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It’s been more than a month since India has introduced its union budget that offered large -scale tax benefits aimed at raising City consumption. This step, however, took little to raise consumer reserves.

FMCG (fast-moved consumer products) fixes 15 shares The India’s National Exchange – grew more than 3%when the budget was made on February 1. However, this action quickly came out.

The index decreased in 18 of the 23 sessions after the budget increase and still decreased by almost 9%, compared to the fall of 4.72% in the Nifty 50 index.

Waiting for shares is united as investors who are taken into account in higher consumer expenses as soon as tax reducing came into force in April. However, investors had to stop their enthusiasm with the merger of the factors.

Many consumers are likely to transmit a higher disposable income resulting from reducing taxes, or spending money on non -FMCG goods such as cars, reports Kranthi Bathini, Director of Strategy for Wealthmills Securities.

“It’s not overnight when FMCG stocks grow up now with tax reducing and Reduction Bid RBI (Reserve Bank of India). It will take some time to see the impact, ”Batini said.

Analysts note that higher estimates also reduced the attractiveness of many FMCG shares.

Another reason for their insufficient work is the “high enough penetration” of some personal and home products, said the pro -lip, co -founder Marcellus Investment Mengress. This means that the companies have already seized a significant share of the market, leaving little space for further growth.

Source: NSE statistics

“The FMCG Indian companies had anemic growth volumes until the recent slowdown in the July -September quarter,” the lips added.

Companies such as Nestle India – with popular brands such as Maggi, Nescafé and Kitkat, under its umbrella, are also focused on consumers with higher income that can spend on premium production.

World Bank data Shows that India’s GDP increased by 7.1% in 2023 to $ 2200 year ago.

Many companies were engaged in the bank on “wave of premium“

They expected consumers to look for better products because they became richer, but sales did not live up to expectations, said Lips in India CNBC.

The growth of direct consumer firms also seized income from FMCG companies with traditional sales channels, he added.

Since February’s stock in ITC – Upper holding in the exquisite FMCG index weighing 30.7% – decreased by 12.3% while while Hindustan Unilever (20.2% weight) lost 11.4%. Other companies weighing such as Dad consumer products and Nestle India decreased by 10.5% and 5.4% respectively.

“Consumer stocks such as Hindustan Unilever, Godrej Consumer Products and others GDP numbers in the second quarter“,” Batini said in India CNBC.

However, he added that the faster growth observed in the financial GDP in the third quarter could signal a “some improvement” in the results of consumer companies.

India’s GDP data per quarter ending December 6.9% last year’s rise in private consumptioncompared to 5.9% three months earlier.

The question for investors is whether they should bet on the FMCG sector – or look elsewhere.

With the trends of consumption “still at best in the best segments,” said Khaszia, Chief Director -General for Kotak Mahindra Asset Management, adding that FMCG stock “requires better profits and/or smaller assessments for sustainable work.”

“Without this stock, they can be related to the range or according to the market movement,” said CNBC in India.

For example, Hindustan Unilever trades at a cost of 48.5 profits, compared to the Nifty 50 Index P/E almost 20.

Gubbi Marcel is positive in certain segments in the consumer space, not in the sector as a whole, emphasizing food and beverages, as well as dishes, which are still growing, given lower barriers to entry and sales on e-commerce platforms.

Perhaps a lesson for investors seeking to find transactions in the Consumer Sector of India must be as demanding in choosing stocks as in their weekly products.

Indian Trade and Industry Minister Pius Goyal Visits to Washington on Monday. Expected the minister Meet the US Trade Representative Jamison Grir and the Secretary of the US Trade Howard Lutno to discuss the trade agreementAccording to the official. Goyala’s visit occurs a few weeks before mutual tariffs from the US came into force, which means that Indian goods imported in the US will face high leaves, which will lead to approximately $ 7 billion annual losses for India, Citi estimated.

We want zero tariffs for car imports in India. As part of a potential trading transaction between Washington and New Delhi Trump Administration presses on the latter on Remove its tariffs on car imports. However, India is reluctant to join this request, although it is open to further reduce the levies, Reuters reports, citing three sources familiar with this issue. Removal of automatic tariffs in India – reaching 110% – smooth Tesla entry into the market. Elon Musk, which is preparing to start selling its electric cars in India.

India remain crucial for the global supply chain. The South -Asian nation has the highest average tariffs for US goods, so it doesn’t surprise that it is unexpected US President Donald Trump threatened to hit India, taking into account imports. However India is becoming increasing Tariffs cannot reduce the importance of NewDeli as a production centersaid Charles van der Stun Stun, President of North America in Mayorsk.

British launch of the smartphone looks nothing on India. According to Ben Wood, the main analyst at CCS Insight Market Company, nothing that launched its new phone (3A) device, is not aimed at the Indian market. The company survived 557% growth last year in India last year by making Nothing that is the fastest growing brand of smartphone in 2024Founder Karl Pay said in January. In addition, the co -founder of Akis Evangelidis plans to move to India to head there at the end of this year.

Indian shares show signs of selection after Nifty 50 The index closed at 22 544.70, an increased slightly less than 1% compared to a week earlier.
A 10-year government bond with a 10-year Indian bond has decreased to 6,687%slightly.

This week at CNBC TV this week, Michel Duris, CEO of the world’s largest AB Inbev, said that India is’one of the big growth markets in the future.

Meanwhile, Seema Mody CNBC reported that investors are rethinking their impact on new markets from the Trump tariffs, and take note of which countries are most and less dependent on the US, however, “however,”continues to remain scratching the head“The results of the efforts of the Prime Minister of the Indian Prime Minister Narendra Modi to negotiate with Trump are still uncertain, weighing Indian shares. In addition, the country’s shares are re -evaluated compared to China, even after the rally in technological actions last week, the analyst said.