Dead Presidents! - India Equity Research: FMCG

Showing posts with label FMCG. Show all posts

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Thursday, August 23, 2012

Revival in monsoon boosts FMCG shares

Shares of seven FMCG shares rose by 0.05% to 4.08% at 15:19 IST on reports of revival of monsoon rains this month. Marico (up 4.08%), Nestle India (up 2.06%), Hindustan Unilever (up 1.36%), ITC (up 0.9%), Jubilant FoodWorks (up 0.56%), Dabur India (up 0.13%) and Colgate-Palmolive (India) (up 0.05%), edged higher. The BSE FMCG index was up 0.78% at 5,277.14 . It outperformed the Sensex, which was down 0.06% at 17,835.72. The BSE FMCG index had outperformed the market over the past one month until 22 August 2012, rising 6.04% compared with the Sensex's 4.01% rise. The index had also outperformed the market in past one quarter, gaining 13.80% as against 11.36% rise in the Sensex. India's monsoon rains were slightly below average in the past week, but heavy downpours in Rajasthan eased fears of a repeat of the widespread drought that gripped the country three years ago. According to reports, overall rainfall deficit has narrowed from 36% earlier to 15% in the last few days, which has pushed up sowing of rice and cotton over their normal acreage. The monsoon rains--which make up around 70% of India's annual rainfall--are crucial to the nation's agriculture sector and broader economy. More than 60% of the country's farmland is rain-fed. The timing, distribution and quantity of rainfall are all important for crops. The four-month southwest monsoon season that starts from June accounts for almost 70% of total annual moisture that Indian soil receives in a year. FMCG firms derive substantial revenue from rural sales