Top picks in FMCG: ITC, Dabur and Jubilant FoodWorks Consumer sentiments continue to be positive: Our FMCG coverage universe is expected to deliver 11/13% YoY revenue/EBITDA growth in 3QFY19. We believe earnings growth is healthy, given that favorable base now evades (13/17% YoY in 3QFY18) and the last leg (Sep-18) of monsoons were weak. Although, cos will enjoy festive benefits in 3Q instead of 2Q, festive sales were tepid and hence we dont expect robust incremental growth. Rural demand continues to outpace urban in the last 6qtrs. CSD channel (5-6% of FMCG revenues) is recovering from the impact of biometrics implementation, while MT (10% mix) and E-commerce (2% mix) continue to be the growth engines in urban markets. Pricing actions have returned in the sector (1-2%) owing to sharp commodity inflation during 2Q. However, with a reversal in crude prices coupled with INR appreciation, we dont expect another round of price hikes in 4QFY19 instead cos should benefit from GM expansion in 4Q assuming ceteris paribas