Business Standard

FMCG stocks seen as safer bet as prospects in other sectors not encouraging

Even after six months of moderation in consumption, the average current valuation of major FMCG players is still at a premium


Shreepad S Aute Mumbai
The management commentary from most fast-moving consumer goods (FMCG) majors for the April-June 2019 quarter (first quarter, or Q1) results so far, with respect to demand recovery, has not been very positive. 

For instance, the management of India’s largest FMCG company — Hindustan Unilever (HUL) — during a Q1 analyst call said, “Looking ahead, we expect near-term demand to remain subdued, given the macroeconomic conditions.” 

The question is, will this lead to a significant correction in FMCG valuations? Analysts believe that might not be the case.

According to Dhananjay Sinha, head of strategy and chief economist at IDFC Securities: “Major

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First Published: Jul 31 2019 | 8:28 PM IST

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