While India’s share markets have been hit hard by coronavirus and other global pressures, some frontline consumer stocks such as HUL have remained resilient to the headwinds. Consumer goods stocks have shown strong performance in the times when the share markets are under tremendous pressure. Three such shares, viz HUL, Pidilite and DMart are likely to be resilient in the times to come too, Vinod Nair, Head of Research, Geojit Financial Services, told Financial Express Online. “Consumption sector is looking stable right now; Pidilite, HUL and Dmart are on radar,” he said.
Notwithstanding today’s minor fall, the shares of British-Dutch FMCG major HUL have gained 5.27% on BSE since the beginning of this year. Meanwhile benchmark index BSE Sensex has lost over 20% in the same period. Similarly, on a year-to-date basis, Pidilite stock has also risen 8.24%; and DMart shares have jumped as much as 14.85% for the period in review, in sharp contrast to Sensex’s fall. Other FMCG and consumer goods stocks have also been resilient. For example, Nestle India has gained 1.43% since January 1.
Despite the headwinds of slowdown in India’s consumer sector, FMCG companies in the country, including HUL and Nestle India, have been faring well for their global parent companies, and have lifted the overall performance of these MNCs. India remains a lucrative market for global companies since it has a very large consumer base, several experts said recently after these companies’ quarterly results were released. “Developed markets like Europe are either in decline or flat. As far as the Indian market is concerned, the growth has only slowed down temporarily and is still higher than what their most developed markets have,” Narendra Solanki, AVP Equity Research, Anand Rathi Securities, had then told Financial Express Online.
Some other consumer shares, even though in red since January, are massive outperformers compared to the benchmark indices. For example, Dabur Ltd is down only 1.3%; Britannia is down 9.2%; and P&G India is down 9.4%. The BSE FMCG Index is down 15% year-to-date, mainly pulled down by ITC Ltd, which fell over 31% during the period. Meanwhile, India’s stock markets ended a very volatile Friday trading session with a massive 4,700-point swing, closing up 1,325 points, or 4.04%, from yesterday’s close.