Indian equities are under pressure on Wednesday, April 22, courtesy of the sell-off seen in IT stocks. One pocket that is managing to offset some of those losses are the FMCG names.
The Nifty FMCG index has gained nearly 4% over the last two sessions, with most of those gains coming after the results reported by Nestle India just a few minutes before market closing on Tuesday.
Nestle India’s results propelled the stock to a record high on Tuesday and the stock is extending those gains further with another 3% advance on Wednesday. With this, Nestle India shares are up 10% in the last two trading sessions.
Nestle India’s domestic sales grew by 23.4% during the quarter with double-digit volume growth compared to the same quarter last year. All product groups contributed to this performance. Both gross and EBITDA margins expanded on a year-on-year basis.
Brokerage firm HSBC maintained its “neutral” rating on Nestle India with a price target of ₹1,410, stating that while they are upgrading their Earnings Per Share (EPS) estimates by 4% to 5%, they remain “neutral” as valuations remain rich.
Nomura though, has maintained its “buy” rating on the stock with a price target of ₹1,500, while Macquarie remains “neutral” with a target of ₹1,400 as it also sees limited upside with the stock trading at 63 times financial year 2027 estimated Earnings Per Share.
Just as HCLTech’s results have taken its fellow IT stocks lower, Nestle India’s results have taken its FMCG peers higher over the last two sessions. Shares of Hindustan Unilever are up 6.5% over Tuesday and today, while those of Tata Consumer, Dabur, Godrej Consumer have also gained between 4% to 5.5% during the same time period.
Hindustan Unilever is set to report its March quarter results on April 30, while Dabur and GCPL are yet to disclose their results date, although they have reported business updates already for the quarter gone by.
Shares of Hindustan Unilever are the second-best performers on the Nifty FMCG index on Wednesday, trading 4% higher, second only to Emami, which has surged 5%. Tata Consumer Products shares are also trading with gains of 3.5% today.