Is it time to sell this FMCG stock?

On Wednesday, the Nifty FMCG index ended with a loss of 0.25%. On intraday basis, it touched a low of 46,230.60, which was equivalent to the low of Monday. However, buying emerged at lower levels and the index managed to recover nearly 200 points from the days low to end at 46,421.45.

There was one particular stock from the FMCG sector which has disappointed it's investors big time and the stock has weightage of around 3% in the FMCG index. The stock is Marico and it marked a fresh 52-week low on Wednesday as bears hammered the price lower by nearly 2.5%.

About the company 

Marico is one of India’s leading consumer products companies in the global beauty and wellness space. Marico touches the lives of 1 out of every 3 Indians, through its portfolio of brands such as Parachute, Saffola, Saffola FITTIFY, Hair & Care, Parachute Advansed, Nihar Naturals, Mediker, Pure Sense, Coco Soul, Revive, Set Wet, Livon, Just Herbs, True Elements and Beardo. 

Technical outlook for the stock 

The stock broke another base with a higher volume. It is in a strong downtrend, trading below all its key short and long-term moving averages. It is 3.86% below the 50DMA and 2.34% below the 20DMA. All moving averages are in the downtrend. MACD has given a fresh sell signal. The Elder impulse system has formed a strong bearish bar. It is below the Anchored VWAP support and also, below the Ichimoku cloud. The KST and TSI indicators have been in the bearish setup. The daily 14 period RSI has entered into the bearish zone. In short, the stock has been registered a fresh breakdown. A move below Rs.468 is negative, and it can test the level of Rs.450 on the downside. Maintain a stop loss at Rs.474 for short position. 

Business updates 

In its recent business update, company reported strong growth across several categories. Parachute Coconut Oil saw high single-digit volume growth, supported by stable consumer pricing and steady copra prices. Value Added Hair Oils experienced double-digit value growth, consolidating on a low base amidst muted sentiment in rural and mass personal care categories.

While Saffola Oils remained stable sequentially, YoY performance dipped due to a high absolute volume base. The company's Foods division continued to scale up, and Premium Personal Care achieved double-digit growth. The Digital First portfolio maintained a healthy run rate, and the International Business exhibited mid-teen constant currency growth, despite a challenging global macro environment and currency headwinds in certain markets.