4 Nifty FMCG stocks to buy after 32% selloff: What past 4 big falls since 2004 hint at

Emkay Global in a fresh technical note said the Nifty FMCG index has corrected 32 per cent, bringing the fall in line with its four major corrections since 2004, when declines were in the 32-34 per cent range. The domestic brokerage said the scale of the correction, along with the current chart set-up, offers price-wise comfort for accumulation in the sector.

The broking firm said the recent index low was formed on March 26, in line with the sector’s seasonal pattern, under which seven of the last eight major bottoms have occurred in February or March. Within the FMCG space, it has highlighted four stocks for accumulation: Godrej Consumer Products Ltd (GCPL), Dabur India Ltd, Balrampur Chini Mills Ltd and Gujarat Ambuja Exports Ltd (GAEL) .

According to Emkay Global, the Nifty FMCG index is taking support at the lower band of an eight-year rising channel. It said this level also coincides with an internal support zone and is accompanied by signs of a selling climax and a bear-trap formation. The brokerage added that the combination of the correction magnitude, the time-wise bottom formation and the chart geometry supports accumulation at current levels.

Emkay Global said SMID stocks have outperformed large-cap FMCG names on both a relative and an absolute basis. It said select mid-cap ideas such as Balrampur Chini and GAEL complement the large-cap accumulation candidates, Godrej Consumer Products and Dabur India.

For the Nifty FMCG index, the brokerage has suggested accumulation in the 49,500-47,800 range, with a stop loss at 46,000 and targets of 56,000 and 62,000. It said the index has already corrected 32 per cent, a seasonal March bottom is in place, and the eight-year channel support is holding.

For Godrej Consumer Products, Emkay Global has suggested accumulation in the Rs 1,100-1,050 range, with a stop loss at Rs 980 and a target of Rs 1,470. It said the stock is rebounding from the strong 980 support level that has held since 2018 after a 40 per cent correction.

For Dabur India, the brokerage has recommended accumulation in the Rs 440-420 range, with a stop loss at Rs 400 and a target of Rs 520. It said the stock is at the lower band of a six-year consolidation and is showing selling climax and bear-trap signals.

For Balrampur Chini, Emkay Global suggested accumulation in the Rs 560-540 range, with a stop loss at Rs 520 and targets of Rs 620 and Rs 660. It said the stock is on the cusp of a breakout, with bullish chart geometry backed by SMID outperformance. 

For GAEL, it has recommended accumulation in the Rs 158-150 range, with a stop loss at Rs 142 and a target of Rs 195, saying the stock has bounced off a role-reversal support after completing its typical correction depth.