Be selective in Indian consumer goods, warns Goldman Sachs

India's consumer good sector is on track to deliver sales and operating profit at an average compound annual growth rate of 13 percent between 2011 to 2025, Goldman Sachs said in a note dated on Tuesday.

Goldman said that the estimates were based on assuming per capita consumption in India would reach the levels of China in 2025.

Within consumer goods, Goldman said skin care, quick service restaurants and jewellery will exceed sector growth, while detergents, oral care and personal wash will lag.

Goldman maintained Hindustan Unilever and Nestle India with 'sell' ratings. Reuters

Goldman thus initiated coverage of Jubilant Foodworks , which operates the Domino's pizza chain in India, with a 'buy' rating and a 12-month target price of Rs 1,704.

The investment bank also maintained a 'buy' rating on cigarette maker ITC and personal care products maker Marico.

But the bank initiated Asian Paints with a 'neutral' rating and a target price of Rs 3,732 , saying the "high growth and returns" are already reflected in current valuations.

Goldman maintained Hindustan Unilever and Nestle India with 'sell' ratings.

Reuters


Updated Date: Dec 20, 2014 20:25 PM

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