FMCG emerged as the top sectoral gainer today; Is it a good time to invest?

ITC, Varun Beverages, Nestle India lift sentiment; analysts see signs of recovery as cost pressures ease

Fast-moving consumer goods (FMCG) stocks led the gains on Dalal Street on May 23, ending the session as the top sectoral performer after ITC’s robust Q4 results improved market sentiment across the space.

The Nifty FMCG index jumped nearly 2 per cent intraday, with marquee names like ITC, Varun Beverages, Nestle India, and Tata Consumer clocking notable gains. The sharp upmove comes after muted action over the past few weeks, especially amid consumption worries and high base inflation.

ITC, Varun Beverages lead rally

Shares of ITC soared 3 per cent to hit an intraday high of Rs 439, ending a four-day losing streak. The cigarette-to-FMCG major reported a net profit before exceptional items of Rs 6,416.85 crore, up 2 per cent year-on-year for the March quarter, supported by growth in the core cigarettes segment and signs of rural revival.

Meanwhile, Varun Beverages jumped over 4.5 per cent, topping the FMCG pack. The stock hit Rs 490.9 on NSE, bouncing back strongly after six consecutive sessions of declines.

Nestle India also joined the party, gaining 1.84 per cent to close at Rs 2,405.1. Tata Consumer Products and Dabur India added 1.39 and 1.01 per cent, respectively, while Hindustan Unilever, Britannia, Marico, and Godrej Consumer ended with moderate gains of up to 1 per cent.

What’s driving the bounce?

Experts attribute the rally to a combination of better-than-expected earnings by ITC, stabilising raw material costs (especially palm oil), and early signs of a rural demand pickup.

“While overall consumption data is still muted, a broader recovery in FMCG demand could kick off from the July-September quarter,” said Abneesh Roy, Executive Director at Nuvama Institutional Equities, to CNBC-TV18.

Roy added that players with strong rural footprint and cost efficiencies like ITC, Nestle, and Britannia—are already showing early signs of a turnaround.

Brokerage view: Who’s in favour?

Brokerages remain positive on names like Bikaji Foods, Nestle, and ITC, citing improving margins and cooling input prices. With raw material inflation easing and volume trends stabilising, FMCG is expected to remain a defensive yet rewarding play heading into FY26.