Godrej Consumer, Marico Q3 Earnings Estimates Cut By BofA; FMCG Stocks Fall
Shares of both the companies fell and the Nifty FMCG declined 1.42%. Of the 14 stocks in the index, 12 were trading in red.
BofA cut the third-quarter earnings estimates of Godrej Consumer Products Ltd.'s and Marico Ltd. after both the companies announced disappointing business updates for the September–December period.
The brokerage reiterated the 'underperform' rating for Marico and reduced the target price on the stock to Rs 550 apiece from Rs 555 per share earlier.
The company’s third-quarter consolidated revenue declined to a low single-digit on a year-on-year basis, tracking a decline in its core business. The core business trend remained unexciting, according to BofA.
The research firm remains 'neutral' on Godrej Consumer Products Ltd. but increased the target price to Rs 1,225 per share from the earlier Rs 1,100 apiece.
The company's third-quarter consolidated sales in rupee terms registered a "low-single-digit" decline. The FMCG company's organic domestic business' underlying volume growth was in the mid-single digits, and its inorganic business grew in double digits, according to its business update released on Friday.
The adverse currency volatility hurt Godrej Group company's performance, the brokerage said. Moderation in its overseas business is also likely to impact business in Q3.
That pulled shares of both the companies lower and the Nifty FMCG declined 1.42%. Of the 14 stocks in the index, 12 were trading in red.
Shares of Marico tumbled 4.76%, the lowest since Dec. 26, before paring some losses to trade 4.26% lower at 11:55 a.m. This compares to a 0.63% decline in the NSE Nifty 50.
The stock has risen 1.51% in 12 months. Total traded volume so far in the day stood at 5.1 times its 30-day average. The relative strength index was at 41.29.
Of the 43 analysts tracking the company, 23 maintain a 'buy' rating, 14 recommend a 'hold', and six suggest a 'sell', according to Bloomberg data. The average 12-month analysts' consensus price target implies an upside of 13.0%.
Shares of Godrej Consumer Products declined 5.81% before paring loss to trade 4.12% lower at 11:15 a.m., compared to a 0.43% advance in the Nifty.
The share price has risen 29% in the last 12 months. The total traded volume so far in the day stood at eight times its 30-day average. The relative strength index was at 68.25.
Of the 37 analysts tracking the company, 28 maintain a 'buy' rating on the stock, seven recommend a 'hold' and two suggest a 'sell', according to Bloomberg data. The average of 12-month analysts' price targets implies a potential upside of 28.3%.
