Performance of FMCG, PSU banks lagged in FY21

The completion of the fiscal year 21 indicates the Indian indices to remain in the green. Currently, in the time the Indian equity market is performing reasonably.

Till now, in FY21 the Nifty moved up by 73% and Sensex by 70% despite the spread in covid-19. However, the performance of few stocks like FMCG, PSU bank, and pharma indices didn’t perform well.

Meanwhile, IT, metal, and auto gained sufficiently on the FY21.

As compared to last year March 31.2020 FMCG grew 26.57%, PSU banks 60.74%, and Nifty pharma 70.09% in Nifty50.

The prominent reasons for the inefficiency are the poor performance of PSU banks since last year.

The involvement of the central bank and the variations in the interest rate led to a surge of PSU. However, the moratorium announcement took the performance down.

At the beginning of the year, the pharma sector did well in the market. But, it went down in the next quarters due to underlying reasons. Some of them are no change in the price during demand-supply, fewer acute disease cases, etc.

Likewise, the FMCG sector was affected due to the spread of the covid-19 virus. The demand for immunity and health-related products increased and FMCG tried to link with the demand.

Still, these sectors have a chance in the upcoming months to grow. The pharma sector has the potential to perform well with the budget 2021 announcement.

On the other hand, the FMCG product demand will increase with the addition of products related to health and immunity.

In terms of investment, the PSU banks do not provide benefits in the current scenario. The investment in blue-chip pharmaceutical companies is favorable for a short-term period.

In the FMCG sector, the investment in ITC and HUL is good in the current period.

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