Business Standard

FMCG, TELCOS ON FPI HOT LIST

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Foreign portfolio investors (FPI) poured nearly ~30,000 crore in stocks of fastmoving consumer goods (FMCG), telecommun­ications, financial services and services sector during the first half of this month.

The FMCG sector saw buying worth ~11,180 crore followed by telecommun­ication at ~6,648 crore, according to data collated by Primeinfob­ase. But analysts said that a large part of the flows into the FMCG sector were due to the block deal in ITC, where the British American Tobacco (BAT) sold a 3.5 per cent stake for around ~17,000 crore.

If not ITC, the inflows into the sector would have been negative. Analysts said the FMCG sector is facing tough times due to stagnating rural demand.

“We expect meaningful volume growth recovery to take a few more quarters. Input cost moderation continues to drive recovery in gross margins for most FMCG companies, which is partly being reinvested in ad spending,” said a note from ICICI Securities. Meanwhile, healthcare stocks saw selling worth ~1,577 crore, oil, gas and consumable­s worth ~1,110 crore, and informatio­n technology stocks ~1,104 crore. FPIS also sold constructi­on company stocks worth ~271 crore and consumer durables worth ~167 crore. Overall, FPIS were net buyers of equities worth ~40,708 crore in the first fortnight of March. Chookaling­am G, founder of Equinomics, said that defensives are not doing well except int hep harm a sector. “IT and FMCG sectors are growing in single digits. Rural demand is low, visible in tractor and FMCG sales,” he said.

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