FMCG stocks underperformed benchmark index

New Delhi: Corporate commentary in the quarter gone by lacked any concrete evidence of pickup in rural demand which reflected in the underperformance of the FMCG sector in every time frame in last one year, JM Financial Institutional Securities said in a report.

Risk-on sentiments are still prevalent in 2024, as is evident from the small- and mid-caps outperformance over Nifty in last one month. However, we continue to believe that 2024 would be the year of large caps over SMID, as asset allocators would prioritise valuation comfort. On a sectoral level, most notable outperformance came from utilities (13.5 per cent), energy (13.4%) and pharma (10.2%) while FMCG underperformed the benchmark in every time frame (1W/M/Y) in last one year, the report said.

66 per cent of the companies in JMFL coverage universe have either met or beaten expectations in Q3 FY24. Revenue growth of 5.7 per cent YoY in companies under coverage (exc. BFSI) missed estimates by 2.3 per cent. EBITDA margin of 17.5 per cent exceeded expectations of 16.7 per cent, but has tapered sequentially (18.7 per cent in Q2FY24). Margins exceeded expectations in sectors like ports, metals, oil & gas and utilities while chemicals and media missed expectations, the report said.

Emerging market equities gained 4.7 per cent in last one month, while Nifty (2.9 per cent) underperformed the EM and DM basket by a wide margin. Entire commodity basket reverted with a gain of 3.2 per cent, while crude prices were up 5.1 per cent.