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Nomura Picks Marico, Tata Consumer, ITC Amidst Commodity Cost Pressure
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Moneycontrol•29-09-2026, 13:07
Nomura Picks Marico, Tata Consumer, ITC Amidst Commodity Cost Pressure
- •Nomura remains positive on select consumer stocks like Marico, Tata Consumer Products, and ITC, rating them 'Buy' due to strong brands, resilient portfolios, and pricing power.
- •The brokerage anticipates volatile demand and margin environments for consumer companies, with potential margin pressure in 2QFY27 from rising commodity costs.
- •Raw material prices, excluding Brent and HDPE, have softened month-on-month in September but remain significantly higher year-on-year, necessitating further price hikes.
- •Increased Brent crude and HDPE prices are expected to raise packaging costs for consumer companies and pressure paint margins.
- •While sugar prices corrected, they are still up year-on-year, potentially impacting margins for Britannia, Nestle, Dabur, ITC, and HUL; however, softer copra prices could support Marico's margins.
Key Questions Answered
Nomura's top 'Buy' picks in consumer staples are Marico, Tata Consumer Products, and ITC.
Nomura flagged that raw material costs remain materially above the product price hikes taken in 1QFY27, which is expected to pressure near-term margins.
Copra prices softened 3% month-on-month and remain 32% below last year, which Nomura expects will support Marico's margins.
