While listed Indian stocks pummelled by bear hammering amid persisting global economic woes in August, shares of several automobile (two-wheeler) companies and FMCG firms beat the fall to record a marked appreciation providing their share owners not just a hedge against falling values but also the opportunity to make profits.

Market experts said that investors betted on consumption-driven theme hoping that the millions of India’s growing middle class would continue to power profit growth at these firms. In August, the benchmark BSE Sensex fell nine per cent on heavy foreign institutional investor selling pulling it down below the 16,000-mark in the last week. Shares of information technology, banking and realty companies bore the major brunt of bear fury.

While large-cap shares were getting hammered on one hand, investors were clinging on to two-wheelers and FMCG stocks in the mid-cap space despite talk of possible slowdown in consumption going ahead. The flight to safety by these investors has so far played out well. In the two-wheeler space, Hero Motocorp’s market capitalisation (m-cap) in August jumped nearly 15 per cent over the previous month to Rs 40,896 crore, while TVS Motor Company’s m-cap rose 12 per cent to Rs 2,627 crore and Bajaj Auto’s m-cap was up seven per cent to Rs 45,516 crore, according to data compiled by Capitaline.

"Two-wheeler penetration in India is still lower compared with other markets and with petrol prices rising sharply, consumers in rural areas will opt for two wheelers instead of four wheelers. As the monsoon dispersion seems to good this year, two wheeler sales are expected to be good," said Abbas Merchant, AVP-research at Jaypee Capital Services.

Commercial vehicle makers such as M&M saw m-cap rise 2.7 per cent to Rs 45,284 crore while Eicher Motors’ m-cap moved up 2.2 per cent to Rs 3,640 crore.

“These companies enjoy robust two-wheeler sales coming in from the rural market, where they enjoy high disposable incomes in their hands. Their dependence on bank finance is very minimal which is why the rural market is immune to rate hikes or higher inflation concerns,” said Kishor Ostwal, chairman and managing director of CNI Research.

Along with two-wheeler companies, m-caps of FMCG companies such as Jubilant Food, Kwality Dairy, Dabur India, Bata India, Asian Paints and Nestle India also witnessed appreciation over the previous month.

The biggest beneficiary in the FMCG space was Jubilant Food, whose m-cap surged nearly 11 per cent to Rs 6,107 crore followed by Kwality Dairy (up 10 per cent to Rs 3,417 crore), Dabur India (up six per cent to Rs 19,246 crore) and Bata India (up 5.5 per cent to Rs 4,464 crore).

“Even as concerns of rising interest rates and higher inflation continue to be there, FMCG companies are still considered a safe bet when compared to other sectors as consumption has still remained upbeat so far. With prices of several commodities showing signs of moderation in the past one month, investors are hoping that margins will improve in the next quarter earnings,” said Ostwal.

Besides FMCG and two-wheeler companies, m-caps of select fertiliser and cement companies also witnessed appreciation over the previous month.

Over all, over 50-odd companies witnessed rise in their m-caps in the BSE-500 index. In percentage terms, SKS Microfinance was the worst performer as its m-cap dropped 52 per cent to Rs 1,435 crore.