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Informist, Friday, Sept. 26, 2025

MUMBAI – Despite positive triggers for the sector, analysts expect the Nifty FMCG index to consolidate next week with a sideways movement. Starting the week on a negative note, the shares of fast-moving consumer goods companies fell for most of the sessions this week to end the week lower.

During the week ended Friday, FMCG stocks continued their downward trend post the rally earlier on the back of reforms in goods and services tax. These stocks rose over 4% till Sept. 4, following which investors booked their profits, analysts said. Despite this, they remain positive on the sector and expect tailwinds such as GST reforms to aid consumption. "A shift in trend may only occur once the index moves above the breakdown level at 56000 points," said Vatsal Bhuva, technical research analyst at LKP Securities.

However, analysts remain unsure about how kirana stores will pass on the benefits of GST rate cuts to consumers. Some kirana store owners were unwilling to pass this benefit to consumers as they still hold older inventory with higher price tags, putting them in a tight spot, several newspapers reported. Analysts await more clarity on how this would be calculated and if they would go back to the company and get some credit. 

The Nifty FMCG reversed all gains in September and was down more than 2% so far this month. The index has breached the level post the announcement of GST reforms by Prime Minister Narendra Modi in his Independence Day speech and crawled back to the level last touched on Jul. 21. On Friday, the index fell for the second session and has declined more than 3% over this period. The index had risen for four continuous weeks before falling for two weeks. 

"On the daily chart, the index is showing a sideways trend, while on the weekly chart it continues to consolidate in the 54000–57000 range. Momentum indicators, RSI (relative strength index) on both the daily and weekly charts, indicate weak momentum in the stock," said Bhuva. The Nifty FMCG index closed 0.5% lower at 54847.55 points. "If the index breaks the 54400 support level, the sentiment could weaken further, keeping the short-term outlook bearish. However, if the index holds above 54000, the broader outlook will remain sideways," he said.

The market has taken the GST rationalisation positively, they said. The reduction in GST rates, income tax slabs, and Reserve Bank of India's repo rate will boost consumption in the sector, Onkar Kelji, a research analyst at IndSec Securities and Finance, said. He sees purchases in premium product categories to be better going forward, given a higher discretionary income in the hands of the consumers. "So, higher discretionary consumption would get a boost, for example, auto. Then, again, real estate could be one of the beneficiaries. So, the premiumisation theme, which has been the strategy to grow, would continue going ahead," he said.

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Following are the resistance and support levels for the stocks for next week as per calculations by Informist based on their prices on the National Stock Exchange:

End

Reported by Simran Rede

Edited by Deepshikha Bhardwaj

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