Nuvama, a brokerage firm, has released a report highlighting its top picks for the fourth quarter of FY25. The report identifies several companies that are expected to perform well, including United Spirits Ltd., United Breweries Ltd., Pidilite Industries Ltd., and Marico Ltd. The brokerage also expects strong performance from Nestle India Ltd., Berger Paints India Ltd., and Emami Ltd.
Nuvama believes that the upcoming summer season will drive sales of cola, beverages, talcum powder, and ice creams, which will benefit companies like Varun Beverages Ltd. and Emami. The report also notes that liquor companies will perform well due to a shift towards premium products, favorable policies in Andhra Pradesh, and the wedding season.
However, the report also highlights some challenges faced by companies. Margins for soaps, snacks, tea, and coconut oil are expected to be under pressure due to increases in the prices of palm oil, copra, and tea, which may negatively affect the year-over-year margins of Tata Consumer Products Ltd., Godrej Consumer Products Ltd., Bikaji Foods International Ltd., and Marico.
The report also notes that the paints sector is showing a slight recovery, but Asian Paints may still face challenges due to the urban slowdown. Nuvama’s pick for the sector is Berger Paints, which is expected to perform better. Colgate-Palmolive is also expected to have a weak quarter.
Rural demand is expected to show a gradual recovery, driven by a strong monsoon season. However, the slowdown in urban areas is expected to continue, affecting traditional grocery stores and modern trade.
Overall, Nuvama’s report provides a positive outlook for some companies, but also highlights some challenges and potential drawbacks. The report serves as a useful guide for investors seeking to make informed decisions about their investments.