Foreign investors have withdrawn money from FMCG stocks for 12 straight months, marking one of the longest selloffs in the sector. The total outflow has reached nearly $5.25 billion, even though foreign inflows into Indian markets rose strongly in July 2026. Analysts say FMCG companies are struggling with weak volume growth, rising input costs, and valuations that remain high compared to earnings.
The impact is visible in share prices. Hindustan Unilever has fallen 18% in one year. ITC has dropped 34%. Dabur has slipped 20%. Tata Consumer has lost 9% this year. In contrast, Nestle has gained 35% and Britannia has risen 4%, showing that select players continue to attract investor interest.
Experts explain that FMCG stocks have traditionally commanded premium valuations because of their stable earnings and strong brands. However, with growth slowing to single digits, investors are questioning whether such premiums are justified. Rising costs and a deficient monsoon add further pressure on demand.
While foreign investors turned net buyers in July with inflows of $2.5 billion, the highest in 13 months, FMCG remained out of favour. Analysts believe recovery will depend on stronger consumer spending and stable commodity prices. Until then, FMCG may continue to face cautious investor sentiment.