FMCG stocks likely to be affected on weak monsoon forecast: VK Sharma, HDFC Securities
A headwind would come if the MET department says that we can get monsoons slightly below normal. This could take the wind out of the FMCG stocks.
| Updated: In a chat with ET Now, VK Sharma, Head of Business, Private Broking & Wealth Management, HDFC Securities, shares his views on consumption stocks.
ET Now: What explains the price action and volume action in some of the consumption names? In 2011 they managed to outperform when global markets were choppy, liquidity was tight but right now, consumer stocks are also experiencing plenty of headwinds, higher commodity prices and a drop in demand.
VK Sharma: You have nailed it on the head. The third headwind would come if the MET department says that we can get monsoons slightly below normal. This could take the wind out of the FMCG stocks which are currently moving up.
However, companies like Zydus Wellness could continue to do well even if the monsoon scenario is not good. This is because they do not sell their consumers to that market. The likes of Lever will take it on the chin in case we do see some kind of an adverse guidance from the MET department.
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