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Stocks of fast-moving consumer goods companies are likely to recover in the coming sessions as money will flow into defensive sectors amid weakness in the broader market. While Jul-Sep earnings from most companies have been weak, those from FMCG companies have been broadly in line with market estimates, with some such as ITC even exceeding expectations.
The strong fundamentals of the FMCG sector are expected to attract investors looking for strong performers in an otherwise subdued market. Investors may buy stocks of major FMCG companies as they are confident of growth in sales volume and operating margin in the near to medium term. Confidence on sales volume growth of FMCG companies stems from strong underlying demand for products, so interest in FMCG shares is bound to continue.
