FMCG major Procter & Gamble (P&G) plans to infuse more than INR 15bn over a period of time in its unlisted Indian arm P&G Home Products to enhance operations in the country. In order to execute the transaction, the authorised share capital of P&G Home Products Ltd (PGHP) has been increased from INR 0.3bn (30mn equity shares of INR 10 each) to INR 0.5bn (50mn shares of INR 10 each).

P&G India, which markets brands, including Vicks, Ariel, Tide, Whisper, Pantene, among others has been achieving double-digit growth consistently for over a decade and is one of P&G's fastest growing markets globally. The company caters to over 650 mn consumers across India and has presence in various verticals. Including beauty and grooming household care and health and well being segment.

FMCG is probably the most competitive market in India. Hence production expansion and supply chain efficiency is key to gaining and maintaining substantial market share. To provide for this constant capital needs to be infused to maintain parity with competitors.

Eoin Treacy's view India's consumer sector is considerably more developed than one might expect of a country where such a large percentage of the population still lives in abject poverty. The quick pace of urbanisation and expansion of the middle class is fuelling additional growth in the fast moving sector.

The BSE Fast Moving Consumer Goods sector broke out of a three-year range in 2009 and continues to trend higher. It has picked up pace over the last six months and is becoming increasingly overextended relative to the 200-day MA. However, a break in the progression of higher reaction lows, currently near 5600, would be required to question medium-term scope for additional upside.

Proctor and Gamble is one of the small number of Autonomies to have listed their foreign affiliates in the markets they are most active in. The company is a dividend aristocrat and yields 3.35%. It has pulled back in line with the wider market over the last week and is currently testing the region of the upper side of the underlying range and the 200-day MA. However, a clear upward dynamic will be required to confirm the return of demand in this area.