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Indian stock market benchmarks closed sharply lower on Tuesday, May 27, as investors booked profits in large-cap stocks amid weak global cues, while mid- and small-caps saw selective buying.

The Sensex fell 625 points, or 0.76%, to close at 81,551.63, and the Nifty 50 dropped 175 points, or 0.70%, to 24,826.20.In contrast, broader markets outperformed, with the BSE Midcap and Smallcap indices rising 0.18% and 0.19%, respectively.

Against this backdrop, we have picked two stocks—both are from the FMCG sector. We also take a closer look at Tuesday’s market performance to identify trends that may shape the indices in the days ahead.

The company achieved a revenue from operations of ₹63,121 crore in FY25, a growth of 2% year-on-year (YoY). Ebitda stood at ₹15,868 crore, as compared to ₹15,474 crore in FY24, a growth of 2.5% YoY. Net profit stood at ₹10,671 crore, a growth of 3.7% YoY. The company is going through a journey towards the premiumization of its brand portfolio. This premiumization trend leads to an increase in acquisitions of key premium brands. HUL has finalized the acquisition of a 90.5% stake in Minimalist. Minimalist turnover crossed ₹500 crore in FY25 revenue.

The company maintains a healthy margin in all its segments, with Home Care at 19%, Beauty & Wellbeing at 32%, Personal Care at 18%, and Foods at 18%. The company expects a gradual improvement in the coming quarters, led by portfolio transformation and improving macroeconomic conditions. According to the medium-term guidance, the Ebitda margin is to be within a healthy range of 22-23%. 

On the macro front, industry is being driven by rural markets, and urban demand is shifting towards e-commerce. Factors like a favourable monsoon forecast, inflation at a 6-year low, and a change in tax slabs may lead to better demand in the coming quarters.

Read this | HUL shifts to cruise control on consumption journey

In FY25, the company’s consolidated volume grew by 4%. Total revenue during the year stood at ₹14,680 crore, growing by 2% YoY, and Ebitda stood at ₹3,319 crore, growing by 3.3% YoY. The company has been successful in increasing its Ebitda margin through efforts like premiumization, better ad spend, and better realizations in international markets. Indonesia business continues to be stable with 5% volume growth and 9% Ebitda growth due to better distribution scale-up and successful launch of new products like shampoo, hair colour and hi electrics, etc.

In addition, the company aims to have a 2 billion customer base by FY27. It is also planning to foray into a new line of business, i.e., pet foods, branded as “Godrej Ninja," aiming for double-digit growth with an investment of ₹500 crore over a period of 5 years, and commenced production in H2 FY25.

Read this | Godrej Consumer’s recovery hinges on premium shift, international play

Indian equities opened on a bearish note on 27 May, and remained under pressure through the session amid profit booking and weak global cues. 

The Nifty 50 opened at 24,957 and hit an intraday low of 24,704 before closing 175 points, or 0.70%, lower at 24,826. It remains above its 20-, 50-, 100- and 200-day EMAs, with an RSI of 57.63. The BSE Sensex opened at 82,038 and slipped to a low of 81,122 before settling at 81,552, down 625 points, or 0.76%, with an RSI of 56.37.

Among sectoral indices, FMCG and auto stocks led the decline. The Nifty FMCG index fell 502 points, or 0.88%, to 56,547, dragged down by ITC, which dropped 2.08% to ₹434. The Nifty Auto index slipped 166 points, or 0.70%, to 23,596, with MRF and Tata Motors losing 1.80% and 1.72%, respectively.

Also read | UBS flags India's high-risk premium despite recent equities upgrade

On the upside, PSU banks and small-caps showed resilience. The Nifty PSU Bank index gained 17 points, or 0.26%, to close at 6,732, led by Punjab National Bank, which rose 1.05% to ₹101. The Nifty Smallcap 50 added 15 points, or 0.18%, to end at 8,495, with Reliance Power gaining 2.68% to ₹52.

Trade Brains Portal is a stock analysis platform. Its trade name is Dailyraven Technologies Pvt. Ltd, and its Sebi-registered research analyst registration number is INH000015729.

Investments in securities are subject to market risks. Read all the related documents carefully before investing.

Registration granted by Sebi and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before making any investment decisions.

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