The fast-moving consumer goods index rose 1.85% on July 1 with Nestle India and Hindustan Unilever rising 3% and 2.7%, respectively, while Dabur gained 4%. The FMCG index was the top Nifty gainer on July 1 with HUL, Nestle among top gainers on the equity benchmark.
HSBC projected consumer staples firms to post steady June-quarter growth, driven by resilient demand and price hikes, but warned that El Niño and weak monsoon rains could weigh on rural demand later in fiscal 2027, reported Reuters.
India is likely to see below-average monsoon rainfall in July, after logging its fifth-driest June since records began in 1901, the country's weather department said on Tuesday, raising concerns over farm output and economic growth.
Meanwhile, a report said Nestlé has cut Maggi grammage across packs amid rising input costs.
Nestlé India has reduced the grammage of its flagship Maggi noodles by 7-9% across multiple pack sizes while keeping maximum retail prices (MRPs) unchanged, according to distributor checks by NDTV Profit in June. The move comes as the company faces higher input costs, particularly from palm oil and packaging materials.
The grammage reduction spans almost the entire Maggi portfolio. The Rs 7 pack has been reduced from 35 grams to 32 grams, a cut of around 9%. The Rs 10 pack has been reduced from 52 grams to 48 grams, while the Rs 15 pack has been trimmed from 75 grams to 70 grams. Larger packs have also seen similar reductions, with the Rs 30 pack reduced from 150 grams to 140 grams, the Rs 60 pack from 300 grams to 280 grams, the Rs 90 pack from 450 grams to 420 grams, and the Rs 120 pack from 600 grams to 560 grams. Except for the smallest pack, most of the revisions translate to a grammage reduction of about 7%.
Meanwhile, an analyst said "investors may fine tune portfolios to discount the potential negative fallout of poor monsoon".
"The major concern weighing on the market now is the poor monsoon which so far has been worse than expected. June has ended with 40% rain deficit and for July, the IMD has predicted below normal rainfall. If this trend continues the actual rainfall this monsoon season may fall below the IMD’s forecast of 90% of long-term average. Market has not yet discounted this negative trend.
"Investors may fine tune portfolios to discount the potential negative fallout of poor monsoon. Partial portfolio adjustment in favour of fixed income may be considered. Also churning of portfolios in favour of monsoon-proof sectors like health care, pharmaceuticals, power and select fairly valued defence stocks is advisable," said VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited.