Across its coverage, HDFC Securities forecasts ~12% YoY revenue growth, with most companies likely to post double‑digit topline expansion. However, persistent raw material inflation is set to weigh on margins. ITC, Bikaji, and Gopal Snacks are likely to report YoY earnings declines, while HUL, Dabur, and Emami may deliver single‑digit earnings growth.
NDTV Profit's special research section collates quality and in-depth equity and economy research reports from across India's top brokerages, asset managers and research agencies. These reports offer NDTV Profit's subscribers an opportunity to expand their understanding of companies, sectors and the economy.
HDFC Securities Institutional Equities
In this report, HDFC Securities believes that FMCG sector valuations continue to de‑rate amid weak earnings visibility and a waning moat. The brokerage maintains its underweight stance and see performance improvement as critical for valuation.
Also Read | Layoffs Are Rising In Tech, But These Skills Are Helping People Unlock Better Pay
Q2 topline is likely to be stronger on a low base and incremental price hikes, but margin delivery should remain muted, given inflationary pressures. With sustained cost headwinds, HDFC Securities may see growth moderation ahead, which alongside margin strain could stress FY27 earnings.
ALSO READ: Auto Q2 Preview: Earnings To Remain Under Pressure Amid Commodity Inflation, Says Motilal Oswal
The brokerage remain selective, with preference for stronger execution-led names such as Godrej Consumer Products, Britannia, Emami Honasa, and Bikaji.
With sector-wide de‑rating, Nestle's valuation now appears more reasonable; hence the brokerage has upgraded the stock to Buy. Given prevailing headwinds, HDFC Securities has trimmed earnings estimates and valuations across its coverage and roll forward its target price from Jun‑27 to Sep‑27.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
