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Q4 Preview: Keep an eye on consumer stocks like Titan, Britannia, Marico, PAG, can give high returns after quarterly results

The consumer sector was also heavily affected due to the lockdown in the Corona virus epidemic. But after the economy is fully opened, now the demand is increasing.

Consumer Durables Sector Outlook: Earning season is on for Q4FY22. The results so far have been mixed. However, there are signs of recovery from the challenges of Kovid 19. The consumer sector was also heavily affected due to the lockdown in the Corona virus epidemic. But after the economy is fully opened, now the demand is increasing. Brokerage houses are giving their views on the sector for the quarter January to March 2022. Brokerage house Emkay Global says that margin pressure may be visible on the results of the companies, which will affect the overall earnings. Cost increase is also one of the reasons. However, good recovery can be seen in some companies. At present, some stocks may outperform after the results.

How can the results of companies stay

Brokerage house Emkay Global says that if we talk about the consumer goods sector, then the Q4FY22 results of Staples may show bearish effect. The staples sector includes companies that are in food, beverages and tobacco manufacturing and distribution. While in the production of non-durable household or personal products. According to the brokerage, margin pressure should keep earnings down for all staples/paints companies. However, ITC appears to be in a better position than its peers with improved performance of cigarettes and a strong earnings outlook. Alcobev’s demand trend remains stable, but rising cost pressures could lead to a fall in margins.

Margin pressure impacts PAT

Volume slowdown and margin pressure will continue in the Staples sector. Talking about paint companies, further growth is expected to be strong due to increase in price, but due to decrease in margins, the PAT of companies will be affected. Volumes in Alcovev will be better than Staples though margin pressure is increasing. The performance of retail companies can be mixed.

Top Largecap and Midcap Stocks

The brokerage has an overweight stance on Alcobev and Retail/QSR. According to the brokerage, Page Industries ie PAG can outperform. Preferred largecap stocks include Page Industries, United Breweries, United Spirits, Titan Company, Britannia, and Marico. Whereas midcap and smallcap include VBL, TCNS, Westlife Development, Devyani Internationa and ABFRL.

Target on BUY rated stocks

Britannia: Rs 3730
Emami: Rs 590
ITC: Rs 304
Marico: Rs 600
Radico Khaitan: Rs 1050
United Breweries: Rs 1810
United Spirits: Rs 1010
Varun Beverages: Rs 1150
ABFRL: Rs 400
Page Industries: Rs 48,200
Titan Company: Rs 2900
Westlife Development: Rs 700
TCNS Clothing: Rs 1070
Devyani International: Rs 210

(Disclaimer: Stock investment advice is given by the brokerage house. These are not the personal views of  digitnews.in. Markets are risky, so take expert opinion before investing.)

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