Highlights:
- Nifty FMCG index down 1.32%, trading at 56,496 as of 1:50 PM on February 5.
- Three-day loss totals nearly 5%, wiping out post-budget gains.
- United Breweries, Nestle India, United Spirits down over 2%.
- ITC, Tata Consumer, Britannia, Dabur, Hindustan Unilever, Marico in red.
- Varun Beverages, Colgate Palmolive, P&G Hygiene, Balrampur Chini Mills trade in green.
- ITC Hotels surges 3.19%, bucking the trend.
FMCG Stocks in Decline Despite Budget Boost
The Nifty FMCG index continued its downward trend for the third straight session, shedding 1.32% to trade at 56,496 on February 5. This extends the sector’s total losses to nearly 5% since the post-budget rally on February 1.
Several frontline FMCG stocks faced heavy selling pressure, with United Breweries, Nestle India, and United Spirits falling over 2%. Other key players, including ITC, Tata Consumer, Britannia, Hindustan Unilever, Dabur, and Marico, also ended in the red.
Why Are FMCG Stocks Falling?
The decline comes despite the Union Budget 2025-26 introducing income tax relief measures, expected to boost consumer spending:
- Tax rebate limit increased to ₹12.75 lakh per annum.
- Basic exemption limit raised from ₹3 lakh to ₹4 lakh under the new tax regime.
Initially, market analysts expected these changes to drive higher consumption, leading to a rally in FMCG stocks on February 1. However, the sector has since witnessed profit booking, reversing early gains.
Top Losers on the Nifty FMCG Index
| Stock | Loss (%) | Price (₹) |
|---|---|---|
| United Breweries | -3.00% | 2,073 |
| Nestle India | -2.41% | — |
| United Spirits | -2.19% | — |
| ITC | -1.53% | — |
| Tata Consumer | -1.41% | — |
| Britannia | -1.27% | — |
| Dabur | -1.20% | — |
| Hindustan Unilever | -1.08% | — |
| Marico | -0.97% | — |
Bright Spots: FMCG Stocks Trading in Green
While most FMCG stocks were in red, a few managed to resist the downtrend:
- Varun Beverages, Colgate Palmolive, P&G Hygiene, and Balrampur Chini Mills recorded minor gains.
- ITC Hotels saw a sharp surge of 3.19%, trading at ₹168.97 per share.
Market Outlook: Will FMCG Stocks Rebound?
Despite short-term losses, analysts believe long-term growth drivers remain intact for the FMCG sector. Factors like rising disposable income, urbanization, and increasing digital consumption trends could help stabilize the market.
Investors will now focus on Q4 earnings reports and consumer demand trends post-budget to assess the sector’s future trajectory.
FMCG stocks have faced profit booking post-Budget 2025, reversing initial gains. While short-term volatility persists, analysts expect a potential recovery in the coming weeks, depending on consumer demand trends and macroeconomic factors.
