Nomura's commodity tracker for Q4 FMCG raw material pricing trends indicates that raw material inflation is building up, with an inflationary trend seen in crude and its derivatives as well as palm oil, while soft or deflationary trends are observed in copra, coffee and tea.
The report highlights that the most impacted companies include Paints, GCPL, GUL and Colgate, whereas Marico, Tata Consumer and Dabur are among the least impacted.
Commodities that saw the most QoQ inflation in Q4
- Brent Crude -- QoQ inflation - +26 per cent | YoY inflation - +6 per cent
- HDPE Crude -- QoQ inflation - +19 per cent | YoY inflation - +14 per cent
- Gold -- QoQ inflation - +20 per cent | YoY inflation - +81 per cent
- Sunflower oil -- QoQ inflation - +18 per cent | YoY inflation - +16 per cent
- Liquid paraffin -- QoQ inflation - +14 per cent | YoY inflation - +27 per cent
Negatively affected companies
- Brent crude: Paint cos
- Palm fatty acids: GCPL, HUL
- Liquid paraffin: Dabur, Marico, HUL, GCPL
Commodities that saw the most QoQ deflation in Q4
- Amla -- QoQ deflation - (-) 23 per cent | YoY deflation - (-) 5 per cent
- Tea -- QoQ deflation - (-) 20 per cent | YoY deflation - (+) 6 per cent
- Coffee- Arabica -- QoQ deflation - (-) 19 per cent | YoY deflation - (-) 15 per cent
- Copra -- QoQ deflation - (-) 18 per cent | YoY deflation - (+) 3 per cent
- Coffee- Robusta -- QoQ deflation - (-) 12 per cent | YoY deflation - (-) 29 per cent
- Wheat -- QoQ deflation - (-) 4 per cent | YoY deflation - (-) 14 per cent
Positively affected companies
- Robusta Coffee: Nestle, HUL
- Arabica Coffee: Tata Consumer
- Wheat: Britannia, Nestle, ITC's FMCG biz
- Copra: Marico
- Tea: Tata Cons, HUL
Neutral prices, no move
- Milk: Nestle, Britannia, QSR cos
- Sugar: Britannia, ITC food biz, Nestle, Dabur
- Maize (sorbitol): Colgate
- Amla: Dabur
- Soda ash: HUL
Company raw material price impact in Q4
- Dabur -- QoQ impact - (-) 8 per cent | YoY impact - 4 per cent
- Marico -- QoQ impact - (-) 6 per cent | YoY impact - 28 per cent
- Nestle -- QoQ impact - (-) 5 per cent | YoY impact - (-) 4 per cent
- Colgate -- QoQ impact - (-) 3 per cent | YoY impact - (-) 6 per cent
- Britannia -- QoQ impact - (-) 2 per cent | YoY impact - (-) 2 per cent
- Tata Cons -- QoQ impact - 1 per cent | YoY impact - (-) 5 per cent
- HUL -- QoQ impact - 3 per cent | YoY impact - 1 per cent
- GCPL -- QoQ impact - 4 per cent | YoY impact - 6 per cent
- Overall paints -- QoQ impact - 0 per cent | YoY impact - 1 per cent
Nomura's top picks
- Consumer Staples: GCPL, Tata Consultancy Services (TCS)
- Consumer Discretionary: Titan
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