JPMorgan says FMCG firms delivering on earnings growth will command premium valuations

US investment bank JPMorgan on Wednesday said fast-moving consumer goods (FMCG) companies delivering on earnings growth will continue to command premium valuations.

In an exclusive interview to CNBC-TV18’s Surabhi Upadhyay from the sidelines of the JPMorgan India Investor Summit, Latika Chopra, FMCG analyst, said, "Valuations for the sector has expanded meaningfully over the last couple of years. I think what is more stark was over the last three months, the rally in the consumer stocks was pretty steep and probably we are seeing normalisation happening now."

According to Latika, "The valuations of the staples sector today trades at 2-3 standard deviation above historical means. It's expensive at all-time premiums versus the market versus global staple companies. So, clearly there is a bit of froth which was sitting and it has corrected a bit."