According to data from National Securities Depository Ltd (NSDL), foreign investors gorged on FMCG (fast-moving consumer goods) equities in the first half of March, with net purchases reaching a four-year high of ₹11,180 crore. In contrast, during the same time the previous year, the amount was ₹662 crore.
The figures were mostly influenced by the ₹3,664.1-crore purchase of 91.5 million ITC shares by sovereign wealth fund GIC (Government of Singapore Investment Corporation), which were offloaded by British American Tobacco (bat) on the stock exchanges over the two-week period.
“FIIs are long-term investors and the correction in FMCG stocks afforded them a good opportunity to pick them up at attractive valuations,” stated S.K. Joshi, ED, Khambatta Securities.
Between March 1 and March 21, the price of an ITC share increased to ₹421.25 from ₹409.50, the price of a HUL share decreased to ₹2,242.35 from ₹2,409.70, and the price of a Nestle India Ltd share decreased to ₹2,553.65 from ₹2,601.45.
“Discretionaries in the premium portfolios should continue to do well. Margins are likely to improve for staples and discretionaries, aided by favourable input prices (primarily due to steady crude-oil prices). Competition, though, is expected to be intense across staples and discretionaries, on aggression by smaller companies in FMCG and existing/new entrants in paints/beers,” according to Anand Rathi in a report.
The price of an ITC share increased to ₹421.25 from ₹409.50 between March 1 and March 21, while the price of a HUL share decreased to ₹2,242.35 from ₹2,095.Moreover, foreign investment poured into other industries, bringing in ₹6,648 crore for telecommunications, ₹5,365 crore for financial services, ₹4,697 crore for services, ₹4,117 crore for consumer services, and ₹4,031 crore for real estate.
)
According to data from NSDL, other industries that received significant inflows of foreign investment included construction (₹633 crore), metals & mining (₹275 crore), capital goods (₹2,838 crore), and automotive and auto components (₹3,697 crore).
In contrast, the share price of Nestle India Ltd. dropped to ₹2,553.65 from ₹2,601.45 during the same period, and foreign investors were net sellers in a number of sectors, including healthcare (₹1,577 crore), oil, gas & consumable fuels (₹1,110 crore), information technology (₹1,104 crore), construction materials (₹271 crore), and consumer durables (₹167 crore). For the next three fiscal years (FY24–FY26), the research estimates a 13% compound annual growth rate (CAGR) in earnings for FMCG companies.
