Can FMCG Stocks Shield Your Portfolio During Current Uncertain Times?

Though Nifty FMCG has on a year-to-date (YTD) foundation has underperformed the bluechip Nifty50 index by a tad proportion, the index has from its 52-week excessive of 66,438.7 has fallen round 15 per cent and in-line among the shares from the basket have additionally declined sharply.

This is in short recorded the autumn in Nifty FMCG shares from all-time excessive ranges

Most of those shares touched their respective file highs both at a time when markets touched their peak or across the time when Finance Minister Nirmala Sitharaman introduced earnings tax reduction throughout her Price range 2025 speech to spice up consumption and spur progress. Nonetheless, from the highs there was recorded a notable correction in among the counters.

FMCG shares seen defying broader market pattern

Now, as market is gyrating between losses and positive factors amid international headwinds within the wake of world tariff warfare, FMCG shares stood in opposition to the time and gave stupendous return of as much as 18 per cent within the final one month.

Stocks like Tata Client Merchandise, Britannia, Godrej Client Merchandise and Marico all gained between 15-18 per cent up to now one month when Nifty on the again of latest hefty positive factors for the previous 4 periods managed to ship over 4 per cent return.

Will uptrend in FMCG shares proceed or wane away going forward?

Sounding optimistic on the prospects of the FMCG basket, Preeyam Tolia- Senior Analysis Analyst- FMCG, Axis Securities.mentioned, “We’re presently experiencing volatility throughout numerous sectors resulting from international macroeconomic uncertainty. In response, traders are typically gravitating in the direction of domestically oriented defensive performs, significantly in consumption.”

Echoing the same view-Ajit Mishra – SVP, Analysis, Religare Broking mentioned, “FMCG shares are gaining traction as traders shift focus to home defensives amid international uncertainty. The sector is supported by softening enter prices (palm oil, crude derivatives), indicators of rural demand restoration, and a continued city premiumization pattern.”

Authorities-led rural spending, moderating inflation, and a powerful monsoon prediction additional increase the outlook, he added.

Opining the same stance Preeyam famous the next robust tailwinds for the sector that are prone to assist in the restoration of the sector in FY26

1. Continued restoration in rural markets

2. A steady inflation outlook of 4-5%, together with the Reserve Financial institution of India’s latest price reduce announcement

3. A standard monsoon forecast

4. Decrease crude oil costs, which can considerably scale back packaging prices

All these components are anticipated to contribute to a gradual restoration within the FMCG sector within the coming quarters. Moreover, the latest correction in selective FMCG shares supplies some margin of security for traders.

Nonetheless, on a cautionary be aware, Hong-Kong based mostly international brokerage CLSA in its latest be aware on shopper shares mentioned, on P/E, Indian FMCG shares are amongst most costly in world, particularly in context of the anaemic progress & shrinking returns.

Likewise, it has turned cautious on Hindustan Unilver and Marico, whereas downgraded Godrej Client to underperform with the goal at Rs 1,060.

Additionally, for each HUL and Marico, the brokerage has a ‘scale back’ name with the goal pegged at Rs 1,924 and Rs 492, respectively.

What ought to traders do?

Mishra mentioned firms from the house are prone to profit from a quantity uptick and margin tailwinds. Buyers can undertake a staggered method, preferring margin-accretive gamers with robust model fairness and rural penetration. ITC affords a pretty mixture of defensiveness and worth, he added.