Britannia, Tata Consumer to HUL: 14 Nifty FMCG stocks rally up to 30% from March lows. What's behind the surge?
FMCG stocks today: Shares of Godrej Consumer Products, Tata Consumer Products, Britannia Industries, and other FMCG stocks have maintained their stellar run for the second consecutive month in April, building on notable gains recorded in March.
For instance, the Godrej Consumer Products share price has gained 9.25% so far in April and risen 30% from its March lows to trade at ₹ 1,266 apiece, while Tata Consumer's share price has also jumped 15.35% in the current month and rallied 24% from March lows.
Britannia Industries' share price has also surged 28% from its March lows, while other stocks such as Marico, United Spirits, Patanjali Foods, Nestle India, Varun Beverages, Emami, Colgate-Palmolive, ITC, United Breweries, Radico Khaitan, and Hindustan Unilever have rallied up to 24% from their March lows.
The strong reversal in these stocks has also propelled the Nifty FMCG index to gain 6% so far in April and 13% from March lows. Meanwhile, overseas investors slowed down their selling spree, offloading ₹ 2,789 crore worth of Fast-Moving Consumer Goods (FMCG) stocks in March, compared to ₹ 6,991 crore worth of stocks sold in February, according to NSDL data.
Investor sentiment has turned favourable towards more domestically focused stocks amid heightening global trade tensions, along with improving liquidity conditions, multiple rate cuts by the RBI, and income stimulus measures, which analysts believe could potentially boost domestic consumption in the current fiscal year.
In addition, reasonable valuations have attracted value buyers to step in, resulting in strong gains for FMCG stocks on Dalal Street. The consumer goods stocks, known for their defensive nature, witnessed heavy selling pressure between October and February amid rising input costs, falling volumes, and weak demand from urban consumers, but analysts expect these challenges to recede in FY26E.
In the Union Budget 2025-2026, the government has shifted its focus from capex to consumption for the first time in a decade, increasing the income tax exemption limit to ₹ 12 lakh in the Union Budget 2025. In line with the budget, the RBI, under the new governor, cut the repo rate for the two consecutive times and been taking various measures such as easing LCR requirements, aiming to boost consumption — a major driver of the Indian economy, prompting analysts to turn bullish on consumer goods makers.
In its latest note, global brokerage firm UBS, has upgraded ratings on select group of stocks in the consumer sector—including Colgate, Trent, HUL and ITC— and retained its bullish view on other stocks such as Avenue Supermarts and GCPL as it believes the sector is poised for a strong rebound in the current fiscal year.
The FMCG sector's share price weakness has been exacerbated by cyclical headwinds to demand and margins in recent years, but UBS expects these to recede in FY26E. As per the brokerage, the recovery is expected to be driven by earnings growth, attractive valuations, and the resolution of structural challenges.
The brokerage expects earnings growth to turn around in FY26 and continue recovering in FY27 as the base normalizes and demand gradually picks up. Compared with 1% median earnings growth in FY25, UBS forecasts 13% growth in FY26 and an earnings CAGR of 12.8% between FY25 and FY27.
According to the brokerage, weak demand and input cost pressures weighing on margins have already been priced in, given the sharp correction in the sector since the October 2024 peak. Valuations are now back in a reasonable range, with any earnings rebound potentially serving as a key catalyst.
The brokerage recent discussions with industry experts indicate rural consumer sentiment is strong, and the demand outlook is promising. It believes urban mass market demand is recovering, with inflation falling from around 7% in FY23 to 3% as of March 2025, while premium segments continue to perform well in urban markets.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
First Published: 28 Apr 2025, 01:36 PM IST
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Economic Times
an hour ago
- Economic Times
Rupee gains 14 paise on Trump hint of no Iran action for now, equity flows
The Indian rupee edged higher to 86.58 per dollar on Friday, marking its first gain in six sessions, fueled by inflows into domestic equities. This appreciation occurred despite high crude oil prices and ongoing tensions between Israel and Iran. Market sentiment was buoyed by signals from US President Trump suggesting a delay in action against Iran. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads The Indian rupee modestly strengthened Friday, its first advance in six days tracking inflows into domestic equities, to close at 86.58 per dollar. The rupee climbed 14 paise despite volatile oil prices and no immediate signs of a truce in the Israel-Iran strength in the rupee came after US President Donald Trump signalled to avoid any precipitate action on Iran. Rebalancing of the FTSE Russell index also led to some flows, traders said. The rupee traded between 86.54 and 86.67 to the dollar on Friday. Brent crude oil prices remained elevated at $77 per barrel, while the dollar index was at 98. A rise in crude oil prices is detrimental to inflation in India as the country is a large importer of the commodity. "Chances of rupee strengthening are very low while crude oil prices are this high. The gain we have seen today is all because of Trump's comments to postpone strikes on Iran," said Anil Bhansali, head of treasury at Finrex Treasury Reserve Bank of India was likely absent today and did not intervene, traders said."The rebalancing flows of the FTSE Russell Index did help, but dollar demand was strong too, which countered the inflow," a trader said. Foreign investors bought Indian equities worth ₹7,940.7 crore on Friday."The only positive we have seen is that FPIs are not large sellers in Indian equities," Bhansali said.
Time of India
2 hours ago
- Time of India
Indian auto industry chart magnet supply chain plans
NEW DELHI: As Indian auto industry faces a magnet supply crunch, following restrictions placed by China, a group of companies, including some homegrown advanced material entities, have come forward to build in-house supply chains. Tired of too many ads? go ad free now The companies have made presentations to govt, including the heavy industries ministry, and assured building of supplies within India to reduce dependence on China. "The companies include Midwest Advanced Materials, Entellus Industries, and public sector Indian Rare Earths (IREL)," sources have told TOI. The sources said that heavy industries secretary Kamran Rizvi has also taken presentations from companies as govt develops strategies for indigenous capabilities in magnet production. "Midwest Advanced Materials made a presentation about their plans to produce rare earth magnets in India with a capacity of 500 tonnes per annum. They forecast that by end of 2026, they will be able to produce custom-made rare earth magnets for the industry," one of the sources said. Entellus, a UK-headquartered company with primary operations in India, also made a presentation to govt, detailing their plans to produce rare earth magnets. "They have told officials that their plant is ready to produce the magnetic powder but will still take some time to produce industry-grade magnets," the source said. IREL, which was among the last to make its presentation, informed govt that once production begins, they will be able to match China's rates. "However, the company said that ore present in Indian geography is 100 times less than in China, the US, and Australia," the source said. Tired of too many ads? go ad free now Companies also told govt that magnet production in India was shut down over the past two decades due to proliferation of cheaper Chinese supplies. "The industry members requested govt to support companies in setting up magnet production by providing incentives and monetary benefits," the source said. Secretary Rizvi told the companies to make "realistic statements about magnet production" as potential customers in the auto sector will suffer due to incorrect assessments. The has also requested potential local producers to provide a firm timeline on supplies, if possible, emphasising that their production line depends on quick procurement. The situation for the auto industry has deteriorated over the past few months as no Indian auto component or vehicle company has managed to get approval from the Chinese govt for procuring rare earth magnets. Also, there has been "no clarity as yet" on any timeline for a confirmed meeting with representatives of Chinese govt, despite intervention of Indian officials. The applications for sourcing magnets have been filed mainly by parts manufacturers who provide fully-built sophisticated component assemblies such as speedometers, electric motors, e-axles, electric water pumps, automatic transmission kits, speakers, sensors, and ignition coils (used in engines). The request for a meeting with Chinese representatives is being pursued not just by industry bodies of component makers (Auto Component Manufacturers Association) and vehicle manufacturers (Society of Indian Automobile Manufacturers), but also facilitated by officials in ministries.
Time of India
2 hours ago
- Time of India
BMC plan to auction prime plots stalled as two govt bodies want to procure them
Mumbai: Eight months after BMC floated tenders to auction three prime land parcels in Mumbai—at Malabar Hill, Worli, and near Crawford market in Fort—the fate of the proposed sale remains uncertain. The move had marked the first time the civic body opted to auction its own plots, indicating a shift in its strategy to monetise real estate assets and generate long-term revenue. However, the auction process faced multiple hurdles. The plan to auction the Malabar Hill plot was scrapped early on following objections from BEST as the land has high-tension transmission lines running through it. Additionally, over 60 residents from the area raised objections, pointing out that the property card of the plot classifies it as a BMC-owned space designated for a public garden. The civic body then proceeded with plans to auction the remaining two plots. These vacant land parcels are to be leased for 30 years, with a provision for renewal for another 30 years, and are expected to bring in substantial revenue for BMC. However, an official said, Central Railway requested a portion of the plot near Crawford market—for free—to construct a passenger outlet from CSMT via a proposed skywalk. "Since the entire plot was listed for auction, carving out a part of it may not be viable," said a civic official. A high-level meeting on the matter was recently held with the chief secretary, the official added. As for the Worli plot, RBI approached BMC independently, although it did not participate in the bidding process. TOI reached out to RBI for comments but got no response. BMC officials confirmed that while bids were received for the Worli land, the responses are still under review. In Oct last year, when the tender was issued a few days before the model code of conduct for the assembly elections kicked in, Shiv Sena (UBT) leader and MLA Aaditya Thackeray opposed the auctions, claiming that BMC is gradually losing control of vital land resources, which could otherwise be used for public infrastructure or amenities.
