Raamdeo Agrawal

Director and founder,

Motilal Oswal Financial Services

The FMCG counter has performed in line with market expectations. The second quarter results of the whole sector were up to market expectations, expect Hindustan Unilever, which posted a 21 per cent drop in bottom line in the September quarter. We expect FMCG companies to continue with the firm growth trajectory in the coming quarters.

However, FMCG stocks are highly priced at present with price-to-equity multiples of over 25. Therefore, we don’t expect any major surge in these stocks next year. It does not indicate that we are bearish on the counter, but we see this sector giving lower returns in the coming months.

Long-term buyers may hold the stocks as we expect the counter to outperform later.