Ambit previews FMCG for F2Q11 (September quarter)

FMCG
 On an aggregate basis our universe is expected to post muted top-line while
EBIDTA margins are robust given soft commodity prices and pricing actions in
the recent past.
 Demand trends remain encouraging and we expect improvements in the top
line
 Pricing action indicates improvement in margins but not across the board.
 We expect margin performance to vary given that some companies have had
price actions taking effect in 3QFY11E. Amongst the Tier-1s, we expect
strongest EBITDA growth in ITC, driven by improving cigarette volume and the
FMCG business showing significant improvement. In the case of HUL we
expect both top line and margins to be in low single digits.
 Mid cap consumer companies to report healthier growth on both top-line and
EBIDTA margins
 Our top picks in the sector are ITC and Nestle.