FMCG stocks HUL, Nestle, GCPL recover from the lows to turn positive, contribute to recovery

Shares of India’s FMCG companies, Hindustan Unilever Ltd. (HUL), Nestle India Ltd. and Godrej Consumer Products Ltd. (GCPL), recovered between 2% to 3% from the lows of the day and turned positive, thereby partially contributing to the recovery seen on the Nifty 50 index.The Nifty 50 index is 70 points off the lows of the day, aided by stocks like HUL, which is contributing between 12 to 13 points to the recovery.

Stock	Recovery From Lows (%)
Hindustan Unilever	3
Nestle India	2
Godrej Consumer	3
Marico	2
Dabur	1.5

As a result of this recovery, nine out of the 15 stocks on the Nifty FMCG index are trading with gains.
The GST on Hair Oils has been cut to 5% from 18% earlier and the new rates have taken effect from September 22.Brokerage firm Macquarie maintained its “outperform” rating on Marico, on Wednesday, with a price target of ₹820. This implies a potential upside of 16% from Tuesday’s closing levels.

Macquarie wrote in its note that Marico sees diversification through digital brands, scale-up of the foods business, premiumisation-led growth in the international markets, along with GST rate cuts, which will aid growth in the hair oils business.

Value Added Hair Oils contributed 19% to Marico’s revenue in the June quarter, while the Coconut Oils business contributed nearly 38% of the India business revenue.

With this recovery, the Nifty FMCG index has now turned positive, having snapped a three-day losing streak.