Nomura highlights promising growth prospects in the Indian consumption sector despite some challenges. The brokerage maintains a positive stance on key players, including Marico, HUL, and ITC, expecting solid growth ahead.

Key Takeaways:

  1. Price Hikes to Return:
    • Price hikes are expected to come back, but volume growth may remain range-bound.
  2. Valuations Remain Attractive:
    • Valuations are seen as reasonable, coupled with a robust growth trajectory for consumption companies.
  3. FY26F Projections:
    • Staples Segment:
      • Volume growth: 5.5% YoY
      • Sales growth: 10% YoY
      • EBITDA growth: 12% YoY
    • Paints Segment:
      • Volume growth: 11% YoY
      • Sales growth: 11% YoY
      • EBITDA growth: 11% YoY
  4. Organized Brands to Gain Market Share:
    • Inflationary pressures are pushing regional and unorganized players to cede market share to larger, organized brands.
  5. Easing Competition in D2C:
    • Direct-to-consumer (D2C) competition is expected to ease, with quick commerce providing an early growth boost.

Nomura’s Recommendations:

  1. Marico:
    • Maintain Buy with a target price of ₹760.
  2. HUL:
    • Maintain Buy with a target price of ₹3,100.
  3. ITC:
    • Maintain Buy with a target price of ₹575.

Conclusion:

Nomura underscores the potential for organized players to thrive amidst market shifts, with solid long-term growth expectations. Key consumption stocks such as Marico, HUL, and ITC remain well-positioned to capitalize on these trends.

Disclaimer: This article is for informational purposes only. Please consult a financial advisor before making investment decisions.

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