Britannia, Dabur, Marico surge on hopes that budget will leave people with more money to buy stuff
- Shares of most FMCG players were rising ahead of the union budget 2022-23 on expectation that the government will spur consumption.
- Overall, Indian markets also rose ahead of the speech by finance minister Nirmala Sitharaman at 11 a.m.
- Check quick developments and news related to the budget at Budget Insider.
AdvertisementShares of large fast moving consumer goods (FMCG) players like Britannia, Dabur, Marico and several others were gaining ahead of the budget speech on expectation that there will be a boost to consumption in the country.
The sector is expecting some measures by the government to increase demand amid tepid rural demand due to high inflation.
Analysts say to boost consumption and support higher disposable income in the hands of the individual's the budget is expected to propose reduction of personal tax outgo.
This will create demand in the overall consumption sector, which is positive for consumer durables and FMCG sector.
In fact, consumer goods companies like Marico have confessed that it is facing poor demand owing to inflation and weak consumption sentiment among consumers.
Rising inflation reduces people’s purchasing power and, on the other hand, it increases the cost of production too, which would shrink the profit of the company.
“We expect announcements on income tax like work-from-home allowance, increase in the standard deduction from existing ₹50,000 to ₹1,00,000, increase in Income tax exemption limit from ₹2.5 lakh to ₹5 lakh, increase Section 80C limit, etc. It will create demand In the overall consumption sector. Considering this, we are positive about the consumer durables and FMCG sectors,” said Amarjeet Maurya of Angel One.
|FMCG companies||Change as of 10:15 a.m., on February 1|
|Tata Consumer Products||+0.86%|
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