Budget 2019 to give a boost to consumption

ET Intelligence Group: With focus on farmers and middle class, the Budget 2019 provides a boost to consumption in the economy, which augurs well for fast moving consumer goods (FMCG) stocks. Most of the FMCG stocks have gained following income support to farmers and income tax rebate to middle-class tax payers with income up to Rs 5 lakhs.

A higher disposable income with these consumers, FMCG companies are expected to report better demand. Rural demand has been strong since the past couple of quarters and the Budget 2019 will aid the sentiment.

Status quo in the case of taxes on tobacco products offers relief to cigarette companies. HUL, ITC, Godrej Consumer Products and Dabur will be major FMCG beneficiaries of tax proposals.