FMCG Stocks Rally: Why Inflation Could Hit Margins And Pricing Power

FMCG stocks are buzzing in the market, but can the sector sustain its recent performance as inflationary pressures rise? Gaurav Sharma, VP & Head of Research, Global Capital, discusses the defensive nature of the FMCG move and highlights the challenges facing the sector. FMCG companies had managed to pass on price hikes effectively in the previous quarter, while raw material procurement supported margins. However, Sharma points to uncertainty over how long companies can continue passing on higher costs. He also discusses pharma as an alternative defensive sector.