At the index level, Nifty FMCG and Nifty Pharma have returned 8% and 7.7%, respectively, compared to a 0.11% decline in the broader Nifty.
In the 20-stock Nifty Pharma index, 16 stocks have posted positive returns. Of these, five have delivered double-digit returns: Granules India (23.43%), Gland Pharma (14.57%), Torrent Pharmaceuticals (11.69%), Ipca Laboratories (10.72%), and Natco Pharma (10.26%).
Other stocks, including Sun Pharmaceutical Industries, JB Chemicals & Pharmaceuticals, Lupin, Aurobindo Pharma, Glenmark Pharmaceuticals, Zydus Lifesciences, Alkem Laboratories, Dr. Reddy’s Laboratories, Divi’s Laboratories, and Cipla, gained between 8.81% and 1.46%.
Conversely, Abbott India, Sanofi India, Mankind Pharma, Biocon, and Laurus Labs have seen their price erode by 0.14%-11.41%.
In the 15-stock Nifty FMCG index, 11 stocks have posted positive returns, with Colgate-Palmolive (India), United Spirits, and ITC leading at 16.58%, 12.51%, and 11.89%, respectively.
Other stocks, including Balrampur Chini Mills, Hindustan Unilever (HUL), Godrej Consumer Products, Britannia Industries, Tata Consumer Products, Dabur India, Marico, and Procter & Gamble Hygiene and Health Care, have delivered returns between 9.89% and 1.56%.
The laggards include Nestle India (-2.58%), Radico Khaitan (-2.83%), United Breweries (-4.26%), and Varun Beverages (-9.38%).
In the Nifty50 index, 27 stocks have posted positive returns over the past month, while the remaining stocks have declined. Only two stocks have delivered double-digit returns of 12%, with ITC being one of them.
The worst performers have been Tata Steel, Hindalco Industries, and Axis Bank with double-digit drops of up to 14%.
Commenting on the trend an independent market expert Hemang Jani told ETNow that the FMCG rally as part of a rotation in the current global backdrop of heightened volatility, forcing people to move to the defensive themes. Better monsoons coupled with the government’s positioning on the rural side fit into this theme.
While the defensive theme has benefited FMCG stocks, their performance has been bolstered by strong earnings for the April-June quarter. Companies like Dabur, HUL, ITC, and Colgate-Palmolive reported impressive results.
“Companies like Marico, and Dabur reported a good set of numbers; Britannia, the volume growth surely surprised; HUL also has some more room on the upside. So, not necessarily from a 12-month perspective, but at least in the near-term, let us say in the next two- or three months perspective I think some of these companies could do well,” Jani added.
In a brokerage note published last week, Nuvama adopted an overweight stance on the FMCG and pharma sectors. It noted that although FMCG stocks are expensive, their strong cash flow visibility justifies the positive outlook.
According to the report, while the Nifty has a 1-year forward P/E of 21, the FMCG sector is trading at a 1-year forward P/E of 45.
Pawan Parakh, Fund Manager at Geojit Financial Services, remains positive on pharma, describing it as a strong defensive bet. He noted that the sector’s growth story remains “pretty comfortable,” supported by structural tailwinds at both macro and micro levels.
“Most of the leading companies have some blockbuster molecules in the pipeline, which should provide tailwinds to their earnings at least for the next two to three years, and obviously, two to three years is a good time for these companies to build a future pipeline,” Parakh added.
(Data inputs by Ritesh Presswala)
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)