Motilal Oswal bullish on these five FMCG stocks

SUMMARY

FMCG is generally considered a defensive sector as it is able to withstand economic cycles. This is also reflected in the stock price performance of the sector over the long term and more so in recent past. The NSE FMCG index has delivered a return of 4.5 percent in the last one month and around 11 percent in the last one year, outperforming the Nifty index. Rural growth slipped below urban growth for several consumer staple companies in the September quarter (Q2FY20) after eight quarters of continued outperformance.  The operating environment in Q2FY20 was perhaps the most somber since the June 2017 quarter (Q1FY18), according to Siddharth Khemka, head of retail research, Motilal Oswal Financial Services. The brokerage is not assuming any benefits of the corporate tax reduction in Q2FY20 as many companies would have paid advance tax. Khemka said the house is bullish on five FMCG stocks.