Consumers Sector Holding Fort, Slipping Realm n Emkay

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Consumers Sector

Holding Fort, Slipping Realm

n     Catalysts like land prices, MSP and NREGA diminishing – thus raising concerns on sustenance of volume growth – expect moderation of volume growth in near term

n     Raw material prices, while off their peaks, not yet in comfort zone; High probability of softening of input cost pressures over the next 3-6 months

n     Intermittent pricing interventions to arrest margin decline at best – since margins to trail input costs, benefit to flow with a lag of 3-6 months

n     Premium valuations, both on absolute and relative basis; Prefer non discretionary and high growth categories - HUL, JFL, GCPL, Marico, Berger Paints, Nestle and GSK Consumer