Sensex Ends 447 Points Higher; Automobile & IT Stocks Rally

The FMCG major, typically known for its urban-centric business model, is aiming to reach an unprecedented 120,000 villages by 2024, backed by rural-focused SKUs.

From 1,000-odd villages in 2017, Nestle grew its presence to 89,000 by 2019. During the period, the share of the rural market in its sales grew from less than 15% to 25%.

However, it had to slow down its product innovation in 2020 due to a higher focus on the protection of core brands in a muted demand environment. But the management has now indicated that more than 40 new products in the pipeline.

Nestle India share price ended the day up by 1.7%.

Speaking of the FMCG sector, have a look at the chart below which shows the performance of BSE Sensex and BSE FMCG index since 2009:

While the Sensex has offered 393% returns since 2009, the BSE FMCG index has gone up a staggering 532% returns over the same period.

Richa Agarwal, lead Smallcap Analyst at Equitymaster, believes this outperformance could continue for many years.

With a rising population and standards of living, Indian's consumption demand for FMCG products will skyrocket over the coming years.

Moving on to news from the automobile sector, shares of Tata Motors ended at their highest level since May 2018 after the company's sales growth in the month of February outperformed sector peers across domestic commercial vehicle (CV) & passenger vehicle (PV) segments.

The auto major reported a 51.1% increase in total sales at 61,365 units in February. It had sold a total of 40,619 units in the same month last year.

The Tata group company reported 54% year-on-year (YoY) growth in domestic sales at 58,473 units in the month of February 2021.

It retained the positive momentum in the PV segment and reported a 119% YoY jump at 27,225 units. The February sales have been the highest-ever sales for Tata Motors PV in nearly 9 years, the company said.

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Disclosure: Equitymaster Agora Research Private Limited (Research Analyst) bearing Registration No. INH000000537 (hereinafter referred as 'Equitymaster') is an independent equity research ...

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