Nifty FMCG Loses For 14th Straight Session, Hits Fresh 52-Week Low Despite Consumption Push - Here's Why

With the uncertainty surrounding global trades, a depreciating rupee, weak Q3 earnings, and sustained foreign portfolio investor (FPI) outflows among other domestic and global cues, the stock market in India has taken a hard beating. The headline indices Sensex and Nifty 50 have declined over 11.7 per cent and 12.7 per cent, respectively, from their all-time highs recorded in late September 2024.

Even the defensive sectors like fast-moving consumer goods (FMCG) and pharma, which are expected to hold up better in times of market stress, have not been immune to the broader market downturn.

The Nifty FMCG index, which consists of 15 major non-durable, mass-consumption product-manufacturing companies, declined for the 14th consecutive session on Thursday, February 20, hitting its fresh 52-week low. The index, which closed flat at 52,337.30, has corrected 10.37 per cent in the previous 14 trading sessions. From its 52-week high, the index has slid 21.23 per cent.

Nifty Pharma has also corrected 13 per cent from its 52-week high.

Among the major FMCG index constituents, the heavyweight ITC has lost over 13 per cent during the past 14 sessions. During the same period, the largest FMCG company in India by market cap Hindustan Unilever crashed more than 10 per cent. Varun Beverages has bled the most, falling 16.56 per cent during the period.

Similarly, other FMCG stocks including Nestle, Tata Consumer Products, and Britannia Industries also corrected between 5-7 per cent each.

Why Are FMCG Stocks Falling?

“In rural areas, sales of FMCG companies grew by 9.9 per cent in Q3 FY25, much higher than 5.7 per cent in Q2. Urban demand also exhibited a recovery with 5 per cent growth in Q3, being nearly double of 2.6 per cent in the previous quarter,” the Reserve Bank of India (RBI) said in its latest monthly bulletin.

This growth in FMCG companies didn’t manage to keep the major listed firm’s stocks buoyant. The tax relief announced in the Union Budget 2025-26, with an aim to boost consumption, also couldn’t manage to provide sentimental support to FMCG stocks. The focus has now shifted to weak demand and margin pressures, analysts say.

Amit Agarwal, SVP of Fundamental Research at Kotak Securities, pointed out that the consumer staples sector is struggling with weak growth in both value and volume, mainly due to a slowdown in urban consumption. On top of that, he said, companies are experiencing higher-than-estimated raw material inflation with lagged/inadequate price increases that are impacting profitability.

Price increases lagged inflation partly due to competitive pressure, along with weak operating leverage is leading to pressure on operating margins, he said. “We have also seen a reduction in advertising and promotional spending by companies,” he said, adding, “Near-term macro environment continues to look challenging.”

“Though, anticipated moderation in inflation, an uptick in government and private spending and the government’s thrust on infrastructure and rural augur well for consumption going forward,” he added.