Nepal protests: 6 listed FMCG companies exposed to India’s neighbour. Should investors worry? – News Air Insight

The political crisis in Nepal, which has left 19 people dead and forced Prime Minister KP Oli to resign, may have implications for at least 6 Indian listed companies, including ITC, HUL and Dabur. However, analysts suggest the impact on their earnings will likely be contained.

PepsiCo’s bottler Varun Beverages, along with Dabur, ITC, Marico, Bikaji Foods and Hindustan Unilever (HUL), operate in Nepal through their Indian entities. These companies have acknowledged the uncertainty but maintained they are closely monitoring the situation. Concerns range from supply chain disruptions to damage to manufacturing facilities if the violence escalates.

“After the recent positive developments, two overhangs remain — the Nepal issue and floods in parts of Punjab and Rajasthan. These may cause some short-term disruption but are unlikely to materially affect FMCG companies on a quarterly basis,” said Abneesh Roy, Executive Director at Nuvama Institutional Equities. The country contributes only 2–3% of sales for companies such as Varun Beverages, ITC and Dabur.

The precedent, analysts point out, lies in Bangladesh. There, political instability hit some consumer firms, with Marico navigating the turmoil relatively well while Emami reported weak numbers. In Nepal, the stakes are arguably lower, Roy said.

“The risks are largely around a temporary hit to GDP growth in Nepal and possible supply chain disruptions, but overall the impact should be minor,” Roy added.

The upheaval began last week, on September 4, after the government announced a ban on 26 social media platforms, including Facebook and YouTube. The move sparked massive protests that left 19 people dead, forcing the authorities to roll back the decision. As demonstrations escalated, protestors set fire to government buildings, prompting armed soldiers to guard parliament and other key offices.Also read: Wild Wednesday! Indians pour Rs 2,700 crore in just 4 hours in a never-ending appetite for IPOs

At about 2:57 pm, FMCG bellwether Hindustan Unilever shares were trading at Rs 2,637, lower 0.21% on the BSE from the last close. Other stocks such as ITC, Marico, Dabur, Bikaji Foods, and Varun Beverages traded in the green, albeit marginally. Nifty FMCG was quoting at 56,760, higher by 0.47%. Nestle India, Britannia Industries, Tata Consumer Products and Varun Beverages led the gains in the afternoon.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)