From a medium term perspective, the fall in commodity prices has been a big benefit for all FMCG companies. Companies which are dependent on agriculture inputs are seeing a much benign cost environment than what they have seen in the last three or four years and that is what is leading to a substantial upgrade in numbers for these companies which is being reflected in the stock moves.
It is also a function on how uncertain the markets are with respect to things globally. FMCG has traditionally been a defensive, so in an uncertain global environment, people would or might continue to move into some of these names because they provide a decent downside support. So, a combination of these two factors has led to sharp outper formance with the FMCG companies.
A lot of the positive news could be getting priced in at these levels from a fundamental perspective but my sense is that given the uncertain global environment, you might continue to see FMCG companies doing well. People would definitely allocate a portion of their funds to these companies and a lot of people were underweight on these companies. You might end up in a situation in which these companies might continue to do well.
It is also a function on how uncertain the markets are with respect to things globally. FMCG has traditionally been a defensive, so in an uncertain global environment, people would or might continue to move into some of these names because they provide a decent downside support. So, a combination of these two factors has led to sharp outper formance with the FMCG companies.
A lot of the positive news could be getting priced in at these levels from a fundamental perspective but my sense is that given the uncertain global environment, you might continue to see FMCG companies doing well. People would definitely allocate a portion of their funds to these companies and a lot of people were underweight on these companies. You might end up in a situation in which these companies might continue to do well.
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