Stocks of fast moving consumer goods (FMCG) companies have taken it on their chin thus far in calendar year 2026 (CY26) with the Nifty FMCG index falling nearly 6 per cent during this period as compared to 0.8 per cent dip in the Nifty 50.
The underperformance has been driven by a sharp fall in ITC stock that has tanked 20 per cent in CY26 to Rs 317 levels now. From a 52-week high of Rs 444.2 hit on 27 May, 2025 on the NSE, the counter has skidded nearly 29 per cent till date.
Radico Khaitan, Varun Beverages, Emami, Patanjali Foods and Tata Consumer are the other key losers in CY26 that lost up to 16 per cent on the NSE, ACE Equity data shows.
ITC, he believes, is likely to outperform most FMCG stocks and has a price target of around Rs 380 levels for the counter in 2026 – up nearly 20 per cent from the current levels.
“The punishment given by the markets to ITC stock post the tax hike on cigarettes has been more than what it deserved. Its other businesses are on a stable footing, and cigarette volumes should pick up over time,” he believes.
Brokerages such as Axis Securities, Elara Capital and Systematix have a hold/accumulate rating on the counter despite the recent developments.
“We cut our earnings estimates by 12.1 /13 per cent for FY27E/FY28E, respectively to factor in the impact of tax hike on the cigarettes business. Expect EBIT CAGR for the cigarette business at -3.3 per cent in FY2 6E -28E due tax increase,” wrote analysts at Elara Capital in a recent note on ITC.
HUL’s exceptional gain
Remain selective
As a strategy, Gaurang Shah, head investment strategist at Geojit Investments remains selectively bullish on the FMCG stocks on the back of a likely improvement in semi-urban and rural demand.
“Profit margins of companies should improve as input cost pressures ease. However, they need to keep a check on advertising & promotional expenses and discounts. Remain positive on Britannia, Nestle, Hindustan Unilever (HUL), ITC, Godrej Consumer, Tata Consumer, Dabur and Marico. Expect 12 – 15 per cent upside in these stocks in the remaining part of 2026,” he said.
Ambareesh Baliga, an independent market expert, suggests investors remain selective as regards FMCG stocks and buy only where there is earnings visibility.