FMCG Index Performance Analyzed

Key Points

• FMCG index down 4% in 2026, ITC’s fall is a major factor.
• Tax hike on cigarettes hit ITC hard, causing a 15% drop.
• Some FMCG stocks like Patanjali Foods are gaining.
• Brokerages predict volume recovery in the next few quarters.
• RSI shows 5 stocks are currently in “oversold” territory.
• Technical analysis suggests potential buying opportunities for some stocks.

The Nifty FMCG index, which tracks companies that make everyday products like food and drinks, has started the year 2026 with a bad surprise. It’s down almost 4 percent. This is mostly because ITC, one of India’s biggest FMCG companies, has fallen a lot.

Meanwhile, the overall Nifty 50 index (which includes many other companies) hasn’t changed much. Many smaller FMCG businesses have also struggled. ITC’s stock price dropped significantly – about 15 percent – because the government raised the tax on cigarettes, starting on February 1st. Other companies like United Spirits, United Breweries, and Radico Khaitan also went down, but some companies, such as Patanjali Foods, were doing better, increasing by nearly 6 percent.

Experts think that some of these problems from the new tax rules will disappear in the next few months (October to December). They believe that people will start buying more products again. A company called Nomura believes that the first part of the year will still be affected by the changes, but things should start to improve later on.

Some analysts, like Elara Capital, think that companies like Marico, Tata Consumer Products, Nestle India, and Emami will grow quickly because people will be buying more of their products. However, Colgate’s growth might be slower because there’s more competition in the market.

ITC is still expected to grow by about 7 percent, thanks to more people buying cigarettes. But the government’s new tax increase could still cause problems for the company. Five specific stocks – ITC, Jubilant FoodWorks, AWL Agri Business, Godfrey Phillips, and United Breweries – look “oversold” according to a tool called the Relative Strength Index (RSI).

The RSI is like a scoreboard that shows if a stock is too high or too low. If it’s below 30, it means the stock might be a good buy. If it’s above 70, it might be a good time to sell. The five stocks mentioned above have been showing signs of being oversold for a while, according to this tool. For example, ITC’s stock chart shows that its RSI dipped below 30 five trading days ago and has stayed there.

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